UPSC CAPF AC 2024 Paper 1 · Question 98
Question 98 of the UPSC CAPF (AC) 2024 Paper I (4 August 2024). Try it first, then open the answer and explanation.
Consider the following statements : 1. Burden of a tax on a commodity is independent of who (buyer or seller) it is explicitly imposed upon 2. Burden of a tax on a commodity depends on the slope of the demand and supply curves Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
निम्नलिखित कथन पर विचार कीजिए : 1. किसी पण्य पर कर का भार इससे स्वतंत्र है कि वह किस (क्रेता या विक्रेता) पर स्पष्टतया अधिरोपित किया जाता है 2. किसी पण्य पर कर का भार मांग और आपूर्ति वक्रों की प्रवणता (ढलान) पर निर्भर करता है उपर्युक्त में से कौन-सा/कौन-से कथन सही है/हैं?
- केवल 1
- केवल 2
- 1 और 2 दोनों
- न तो 1, न ही 2
Show answer
Answer: (3) Both 1 and 2
उत्तर: (3) 1 और 2 दोनों
The economic incidence of a tax does not depend on whether the law levies it on the buyer or the seller; the market price adjusts so that the final split of the burden is the same, so statement 1 is correct. That split depends on the relative slopes (elasticities) of demand and supply, with the less elastic side bearing more of the tax, so statement 2 is also correct.