Chapter 8: Problem 269

Suppose you purchase a transistor radio and pay \(6 \%\) sales tax on it. Is this the only tax which you are paying? Explain.

Short Answer

Expert verified

The only known tax being paid on the transistor radio, based on the given information, is the 6% sales tax. There could be other taxes, such as import tax or VAT, but we do not have enough information to determine that.

Step by step solution

Understanding Sales Tax

Sales tax is a type of tax that is added to the price of goods and services when they are purchased. In this case, a 6% sales tax is applied to the purchase of the transistor radio. This means that 6% of the cost of the radio is added as tax, and the buyer pays this additional amount.

Considering Other Taxes

There may be other types of taxes that could be applicable to the purchase of a transistor radio, such as import tax or value-added tax (VAT) depending on the location and regulation of the region. Import tax is applied by some countries on imported goods, which can differ depending on the type and value of the item, and the location of the purchase. Value-added tax (VAT) is a consumption tax placed on products and services at each stage of the supply chain, where value is added. In some cases, VAT replaces sales tax in certain countries.

Analysis of Taxes Paid

It is crucial to determine whether any additional taxes have been included in the price of the transistor radio before the 6% sales tax is added. This information is necessary to evaluate if there are other taxes paid on the item alongside sales tax. In the absence of further information about possible import taxes or the presence of VAT being included in the price, the only known tax being paid on the transistor radio is the 6% sales tax. In conclusion, based on the given information, we can only conclude that a 6% sales tax is being paid on the purchase of the transistor radio. There might be other taxes involved, but there is not enough information provided to determine this.

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Suppose you purchase a transistor radio and pay \(6 \%\) sales tax on it. Is this the only tax which you are paying? Explain.

Short Answer

Step by step solution

Understanding Sales Tax

Considering Other Taxes

Analysis of Taxes Paid

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