Question

Consumer A and Consumer B live in the same state where a sales taxes increase of 1% on all items has been enacted Consumer A has an income of $50,000 per year and Consumer B has an income of \$250,000 per year. Choose all scenarios that correctly describe the effects of the sales tax increase on Consumer A versus Consumer B.

Answer 1

Customer A would be much worse off as a result of the sales rate increase than Customer B.

Customer B will face fewer negative opportunity costs as a result of the sales raising taxes than Consumer A.

Customer A sales tax rate rises of 2% on a $10,000 car buy equals 2% of Consumer A's income, but only 4% of Consumer B's revenue.

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Answer 2

Answer:

A,C, and E

Explanation:

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