What Happens to the Total Surplus in a Market When

question 188

Multiple Choice

What happens to the total surplus in a market when the government imposes a tax?

• A)Total surplus increases by the amount of the tax.
• B)Total surplus increases but by less than the amount of the tax.
• C)Total surplus decreases.
• D)Total surplus is unaffected by the tax.

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Definitions:

Tsunami

A series of large ocean waves generated by significant disturbances such as underwater earthquakes, volcanic eruptions, or landslides.

Seafloor

The bottom layer of the ocean, consisting of sediment, rock, and organic material, shaped by geological and biological processes.

Landslides

Gravitational forces causing the downward shift of earth materials, rocks, or debris along a slope.

Volcanic Eruptions

The release of magma, ash, and gases from a volcano, a geological process that can significantly alter the surrounding landscape.