On Which of the Following Goods or Services Would the Imposition

question 155

Multiple Choice

On which of the following goods or services would the imposition of a government tax most likely result in more efficient allocation of our nation's resources?

• A)Chemicals that produce toxic material
• B)Textbooks
• C)Beef liver
• D)Seat belts
• E)Cars

---

Definitions:

Initial Cost

The initial expenditure needed to acquire an asset or initiate a project, encompassing purchase price and any other costs necessary to get the asset ready for use.

Straight-Line Depreciation

A method of depreciating an asset where its cost is reduced equally over its useful life.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment, by calculating the difference between its present value of cash inflows and investment cost.