The efficiency loss of a tax is:
A. the net value of sacrificed output caused by the tax.
B. that portion of the tax paid by producers minus the portion paid by consumers.
C. that portion of the tax paid by consumers minus the portion paid by producers.
D. the total tax revenue minus the output loss caused by the tax.
Answer: A
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Mark loves ice cream. At any point in time, he will buy an additional ice cream cone if
A) the marginal benefit from it exceeds the price. B) the marginal benefit from it is zero. C) his willingness to pay is less than the price. D) there is no deadweight loss produced by his purchase of a cone. E) None of the above answers is correct.
When a person possesses a comparative advantage in the production of one good or service, it: a. means that the person's opportunity cost of producing that good or service is higher than for that of other goods. b. discourages specialization
c. promotes greater self-sufficiency. d. permits gains from trade to be realized due to a more efficient use of resources.