An Unintended Effect of a New Tax Placed on the Producers

question 67

Multiple Choice

An unintended effect of a new tax placed on the producers of good A may include

• A) a higher price paid by the consumers of good A.
• B) less consumers' surplus for the buyers of good A.
• C) fewer workers employed in the production of good A.
• D) an increase in the supply of good A.
• E) a, b, and c

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Definitions:

Factory Utilities

Expenses incurred for the utilities used in the manufacturing plant, such as electricity, gas, and water.

Activity-Based Costing

Activity-based costing is a method of assigning indirect costs to products and services based on the activities they require, aiming for more accurate cost management.

Volume-Based Allocation

A method of distributing resources, costs, or revenues proportionally based on the volume of goods produced or services rendered.

Product Costing

The process of determining the total cost involved in producing a product, including raw material, labor, and overhead costs.