The Dead-Weight Loss from an Excise Tax

question 15

Multiple Choice

The dead-weight loss from an excise tax

• A) is greater if demand is perfectly inelastic.
• B) is caused by a shift in consumer preferences when the tax is raised.
• C) is the lost surplus that results from higher prices and lower output resulting from the tax.
• D) is of little concern to policy makers since all excise taxes are "sin" taxes.
• E) is the difference between consumer surplus and producer surplus.

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Definitions:

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