When the Government Imposes an Excise Tax,the Deadweight Loss Is

question 7

Multiple Choice

When the government imposes an excise tax,the deadweight loss is caused by:

• A)equal the tax revenue paid to the government.
• B)be greater than the tax revenue paid to the government.
• C)be less than the tax revenue paid to the government.
• D)prevention of transactions because of the cost of the tax.

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Definitions:

Short Run

A period in economics during which some factors of production or inputs are fixed in quantity and cannot be changed.

Industry

A distinct group of productive or service businesses that share similar characteristics, processes, or goods.

Perfect Competitor

A theoretical firm in a perfectly competitive market where no single buyer or seller has the market power to influence prices.

Long Run

The long run is a period in which all factors of production and costs are variable, allowing for complete adjustment to changes.