The Deadweight Loss (Or Excess Burden) Resulting from Levying a Tax

question 10

Multiple Choice

The deadweight loss (or excess burden) resulting from levying a tax on an economic activity is the

• A) tax revenue raised by the government as the result of the tax.
• B) loss of potential gains from trade from activities forgone because of the tax.
• C) increase in the price of an activity as the result of the tax levied on it.
• D) marginal benefits derived from the expansion in government activities made possible by the increase in tax revenues.

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