Excise Taxes Are Taxes That Are

question 88

Multiple Choice

Excise taxes are taxes that are

• A) applied to all goods and activities.
• B) usually applied to inferior goods.
• C) usually applied to income and capital gains.
• D) never applied to goods or activities.
• E) applied to a particular good or activity.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which each supplier's offerings are perfectly substitutable by the consumers.

Profit-Maximizing Rule

A principle stating that firms achieve maximum profit when they produce goods or services to the point where marginal cost equals marginal revenue.

Cost-Minimization Rule

A principle in economics that suggests a firm should produce any given output at the lowest possible cost.

Statements

Assertions or declarations, often formal and written, detailing facts or opinions.