A greater burden of taxes on essential goods is borne by the

(a)Middle income group (b)Higher income group (c)lower income group (d)People falling between the middle and the higher income group

EXPLANATION:

What are Essential goods

Essential goods simply means basic items required by a consumer in order to sustain health or life. Examples includes

food and consumer items,

emergency products,

medical and hygiene supplies (including pharmaceutical products),

refined petroleum products and

emergency clean-up products.

Essential goods also all inputs in the supply chain required for the production, distribution and retail of the essential goods; and

Features of Essential goods

consumers are unable (or unwilling) to eliminate them from their budgets

Essential goods are non-cyclical, meaning they are needed and used year-round, not just seasonally.

Essential goods have a low elasticity of demand

Essential goods are also called necessity good or a necessary good

Essential goods are less sensitive to income change ( Consumers will buy regardless of the changes in their income levels)

Essential goods poseses repetitive purchases at different durations.

Indifference curves for essential goods bend sharply as use approaches zero because no amount of any other good may substitute for the essential

Burden of Tax on Essential goods

Because lower-income households spend a greater share of their income on consumption than higher-income households do, the burden of a tax is regressive when measured as a share of current income: the tax burden as a share of income is highest for low-income households and falls sharply as household income rises.

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Result

Total Questions: 9

Attempt: 8

Correct : 3

Wrong: 5

Percentage: 33%