Questions

The ancient Greek word “bárbaros,” from which it derives, meant “babbler,”.In the Greek ear, speakers of a foreign tongue made unintelligible sounds (“bar bar bar”). Similar words exist in other Indo-European languages, including the Sanskrit “barbara,” which means “stammering.”The word “barbarian” originated in ancient Greece and was initially used to describe all non-Greek-speaking peoples, including Persians, Egyptians, Medes and Phoenicians.

Only if either demand or supply was either completely elastic or inelastic will the tax burden fall entirely on either the buyer or the seller. Between these 2 extremes, tax incidence varies continuously from a perfectly inelastic supply or perfectly elastic demand, where the sellers assumes the entire burden of the tax to the perfectly elastic supply or perfectly inelastic demand where the buyers bear the entire burden. To better see how the elasticity of supply and demand affects tax incidence, consider a 20% tax on a can of soda. Suppose the government decides that the buyer should pay the 20% tax. Does this mean that the buyers will be paying 20% more, or will sellers have to share some of the tax burden? Since higher prices decrease demand, regardless of the reason for the higher prices, sellers will share some of the burden. How much of the burden will be determined by the elasticity of supply and demand for the product?