A Deadweight Loss Results from the Imposition of a Tax

question 75

Multiple Choice

A deadweight loss results from the imposition of a tax on a good because the tax

• A) induces the government to increase its expenditures.
• B) reduces the quantity of exchanges between buyers and sellers.
• C) causes a disequilibrium in the market.
• D) imposes a loss on buyers that is greater than the loss to sellers.

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Definitions:

Properly Greased

Refers to the application of an appropriate amount of grease to mechanical parts to ensure smooth operation and prevent wear.

Bearing Caps

Components that help to secure and protect bearings, ensuring they remain in their proper position.

Matched Set

Items that are manufactured or selected to work together optimally, often referring to parts that are used together in machinery or systems.

U-joint Fails

The failure of a universal joint, a crucial component in the drivetrain of a vehicle, leading to a loss of connection between the driveshaft and the differential or gearbox.