A Tax on a Good Results in a Deadweight Loss

question 132

True/False

A tax on a good results in a deadweight loss to society.

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Definitions:

Average Product

The output per unit of input, calculated by dividing total product by the quantity of input.

Labor

The physical and mental effort used in the production of goods and services.

Marginal Product

The increase in output that arises from an additional unit of input.

Nonlabor Resources

Resources used in the production process that do not involve human labor, such as capital, land, and raw materials.