Which of the following statements about the burden of a tax is correct? a. The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation. b. The tax burden generated from a tax placed on a good consumers perceive to be a necessity will fall most heavily on the sellers of the good. c. The tax burden falls most heavily on the side of the market (buyers or sellers) that is most willing to leave the market when price movements are unfavorable to them. d. The burden of a tax lands on the side of the market (buyers or sellers) from which it is collected.

The correct statement is: **a. The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.** **Explanation:** - **Option a** accurately reflects economic theory. The **economic incidence** of a tax (who ultimately bears the burden) depends on the **elasticities of supply and demand**. If demand is inelastic relative to supply, consumers bear a larger burden of the tax, and vice versa. Legislation determines the **statutory incidence** (who is legally responsible for paying the tax), but this does not necessarily dictate who bears the economic burden. - **Option b** is incorrect because if consumers perceive a good as a necessity, the demand for it is likely to be inelastic. In such cases, consumers would bear a larger share of the tax burden, not the sellers. - **Option c** misunderstands the concept of elasticity. The tax burden falls on the side of the market that is **less willing** to leave the market when prices change (i.e., the more inelastic side), not the side that is more willing to leave. - **Option d** is incorrect because the side of the market where the tax is **legally imposed** (statutory incidence) does not necessarily bear the economic burden. The actual burden depends on the relative elasticities of supply and demand. **Therefore, option a is the correct statement.** **Answer:** a