Which of the Following Statements Is True of the Tax

question 144

Multiple Choice

Which of the following statements is true of the tax on gasoline?

• A)The cost of collecting a gasoline tax outweighs the revenues raised by the tax.
• B)It is preferred to tolls as the best solution to road congestion.
• C)It discourages driving on noncongested roads, even though there is no congestion externality for these roads.
• D)Both b and c are correct.

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Definitions:

Fixed Cost

Overheads that are not affected by the volume of production or sales, covering rent, employee salaries, and insurance fees.

Ending Inventory

Ending inventory refers to the final value of goods available for sale at the end of an accounting period.

Lawn Chairs

Portable chairs designed for use outdoors, particularly in lawns, gardens, or for leisure activities.

Budgeted Sales

Projected revenues a company expects to generate from its operations in a specific period, used for financial planning and performance evaluation.