The Deadweight Loss of a Tax Is

question 99

Multiple Choice

The deadweight loss of a tax is

• A)the reduction in economic welfare of taxpayers that exceeds the revenue raised by the government.
• B)the improved efficiency created as people reallocate resources according to the tax incentive rather than the true costs and benefits.
• C)the loss in tax revenues.
• D)Both a and b are correct.

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Definitions:

Id

In psychoanalytic theory, the part of the human psyche that is the source of instinctual impulses and demands for immediate satisfaction of primitive needs.

Personality Structure

The organized pattern of behavioral and emotional characteristics, traits, and processes unique to an individual.

Instincts

The biologically determined and innate patterns of behavior that exist in both people and animals.

Defense Mechanisms

Unconscious strategies used by individuals to protect themselves from anxiety or unacceptable thoughts and feelings.