When a Tax Is Imposed,consumer Surplus and Producer Surplus Are

question 141

Multiple Choice

When a tax is imposed,consumer surplus and producer surplus are reallocated to

• A) social welfare.
• B) tax revenue and deadweight loss.
• C) tax revenue.
• D) deadweight loss.
• E) government spending on public services.

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Definitions:

Classification

The action or process of categorizing something according to shared qualities or characteristics.

Basis

In finance, the difference between the cash price and the futures price of an asset; in accounting, the initial value of an asset for tax purposes.

Vehicles

Modes of transportation that include cars, trucks, bicycles, and any other means of transporting people or goods.

Nonrenewable Sources

Natural resources such as coal, oil, and natural gas that cannot be replenished on a human timescale.