An Efficient Tax System Should Include All the Following Except

question 152

Multiple Choice

An efficient tax system should include all the following except

• A)minimum deadweight losses.
• B)a low marginal tax rate.
• C)minimal wasting of resources.
• D)taxing at a rate that is positively related to price elasticity of demand.
• E)taxing at a rate that is inversely related to price elasticity of supply.

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Definitions:

Fixed Expenses

Costs that do not vary with the level of production or sales over a given period, such as rent or salaries.

Margin Of Safety

The difference between actual or budgeted sales and the break-even point, indicating the risk level of not covering fixed costs.

Contribution Format

A form of income statement where costs are divided into variable and fixed, and the contribution margin is calculated to determine profitability.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, displaying revenue, expenses, and profit or loss.