Practice mode Income Inequality

Where a tax can be shifted, what determines its incidence?

Correct answer B. Elasticities of demand and supply

Explanation

The burden of a tax falls more heavily on whichever side of the market is less able to change its behaviour. The relative price elasticities of demand and supply therefore decide who bears it.

Report a problem

Answer checked 11 October 2026 How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Where a tax can be shifted, what determines its incidence?

Discussion

Have a question about this answer? Cancel reply

Where a tax can be shifted, what determines its incidence?

More Income Inequality questions

Since standard measures of income distribution leave out in-kind transfers, how do they relate to the true inequality of living standards?

What effect will a spell of unemployment caused by a recession have on a worker’s income?

If people can borrow and lend to smooth their living standards perfectly over their lifetimes, which measure best reflects the distribution of living standards?

Under the maximin criterion from Rawls’s theory of justice, what should the government aim to do?

Discussion

Have a question about this answer? Cancel reply