Tax incidence and its effects - Jamb Economics Past Questions and Answers

Question 6:

• JAMB 1998

When an indirect tax is levied on the producer of a good, the burden on the consumer will depend largely on the?

A. Elasticity of demand for the good
B. Proportion of the consumer's income spent on the good
C. Elasticities of demand and supply of the commodity
D. Availability of substitiutes for the commodity

Question 7:

• JAMB 1999

The price of a good will not be affected by the imposition of a sales tax on it if the?

A. Supply is inelastic
B. Demand is inelastic
C. Supply is perfectly elastic
D. Demand is perfectly elastic

Question 8:

• JAMB 2003

The effect of an increase in the personal income tax is to

A. Reduce unemployment
B. Raise the absolute price level
C. Reduce the disposable income
D. Distort the economy

Question 9:

• JAMB 2004

The tax levied on goods and services at each stage of production is

A. Surtax
B. VAT
C. Ad valorem tax
D. PAYE

Question 10:

• JAMB 2006

The burden of a government tax on a commodity whose demand is inelastic will

A. Be borne only by the government
B. Fall more heavily on consumers
C. Be shared equally between consumers and producers
D. Fall more heavily on producers