Question

QUESTION 52 Figure 6-22 Tanie 5 10 15 20 25 30 35 40 45 50 55 60 65 70 qani Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government? O a. The buyers send the tax payment. O b. The question of who sends the tax payment cannot be determined from the graph. Oc. A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers. O d. The sellers send the tax payment QUESTION 53 A payroll tax is a O a fixed number of dollars that every firm must pay to the government for each worker that the firm hires. O b. tax on the wages that firms pay their workers. O c. tax on all wages above the minimum wage. Od tax that each firm must pay to the government before the firm can hire workers and operate its business.

Answer 1

1. The buyers send the tax payment.

Explanation

Who sends the tax payment or who bears the tax burden (whether sellers or buyers) depends on the elasticity of supply and demand curves. The most inelastic side bears the tax burden. In the diagram, supply curves are flatter than the demand curve, which means the supply is more elastic than demand. Hence, consumers will bear the tax burden.

2. Payroll tax is a tax on the wages that firms pay their workers.

Payroll tax is the tax employers deduct from its employee's salaries and pays as tax to the goverment.