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How does a specific tax differ from an ad valorem tax?
A
- A specific tax is a fixed amount per unit.
- An ad valorem tax is a fixed amount per unit.
- The money value of both taxes remains constant as price rises.
B
- A specific tax is a fixed amount per unit.
- An ad valorem tax is a percentage of the price.
- The money value of an ad valorem tax rises as price rises.
C
- A specific tax is a percentage of the price.
- An ad valorem tax is a fixed amount per unit.
- The money value of a specific tax rises as price rises.
D
- A specific tax is a fixed percentage of the price.
- An ad valorem tax is a fixed amount per unit.
- The money value of an ad valorem tax falls as price rises.
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3.2.1 impact and incidence of specific indirect taxes Flashcards
17 flashcards on CIE Intl A Level Economics 3.2.1 impact and incidence of specific indirect taxes: the key terms and definitions you need to recall.