A production possibilities frontier is a diagram that shows the combinations of output that an economy can produce, given its current factors of production and level of technology

Suppose an excise tax is imposed on luxury boats and yachts. Economists argue that such a tax

a. is sure to be vertically equitable, since buyers of luxury boats and yachts are wealthy. b. entails no deadweight loss as long as buyers of boats and yachts can easily substitute one luxury good for another. c. violates the benefits principle of taxation. d. may burden workers in the luxury-boat-and-yacht industry more than it burdens the buyers of luxury boats and yachts.

________ demonstrates that an optimal (or most efficient) level of output exists for every public good.

A. The Tiebout hypothesis B. Samuelson's theory of public expenditure C. The Coase theorem D. The Theory of Public Choice