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:

Chicago School Theorists

Chicago School Theorists are economists and legal scholars associated with the University of Chicago, known for their advocacy of free-market principles and minimal government intervention.

Antitrust Policy

comprises laws and regulations designed to promote competition and prevent monopolies, ensuring fair business practices.

Sherman Act

A foundational antitrust law in the United States, passed in 1890, to prevent anti-competitive practices, monopolies, and to encourage competition.

Restraint On Trade

Legal concept that refers to practices that limit free trading and competition between businesses.