For which of the following products would the burden of a tax likely fall more heavily on the sellers? a. Clothing b. Jewelry c. Food d. Housing

To determine which product's tax burden would fall more heavily on sellers, we need to consider the **elasticity of supply and demand** for each product. **Tax incidence** (who bears the burden of a tax) depends on the relative elasticities: - **If supply is more inelastic than demand**, sellers bear a larger share of the tax burden. - **If demand is more inelastic than supply**, buyers bear a larger share of the tax burden. Let's analyze each option: 1. **Clothing** - **Demand Elasticity**: Relatively elastic; consumers can easily switch brands or styles. - **Supply Elasticity**: Also somewhat elastic as manufacturers can adjust production. - **Tax Burden**: Likely shared, but not heavily on sellers. 2. **Jewelry** - **Demand Elasticity**: Inelastic; often considered a luxury good with fewer substitutes. - **Supply Elasticity**: More elastic as suppliers can source from various materials and regions. - **Tax Burden**: More on buyers due to inelastic demand. 3. **Food** - **Demand Elasticity**: Generally inelastic since food is a necessity. - **Supply Elasticity**: Can vary, but often more elastic as producers can adjust crop yields, for example. - **Tax Burden**: More on consumers, as producers can relatively easily adjust supply. 4. **Housing** - **Demand Elasticity**: Inelastic in the short term because housing is a necessity and has fewer immediate substitutes. - **Supply Elasticity**: Highly inelastic; increasing housing supply involves significant time, cost, and regulatory barriers. - **Tax Burden**: Heavily falls on sellers because they cannot easily adjust the housing supply in response to the tax. **Conclusion:** **d. Housing** is the product where the tax burden would fall more heavily on the sellers due to its highly inelastic supply relative to demand. **Answer:** d. Housing