Figure 8-19 the Vertical Distance Between Points a and B Represents the Represents

question 56

Multiple Choice

Figure 8-19
The vertical distance between points A and B represents the original tax.
-Refer to Figure 8-19.The original tax can be represented by the vertical distance AB.Suppose the government is deciding whether to lower the tax to CD or raise it to FG.Which of the following statements is correct?

• A)Compared to the original tax,the larger tax will decrease both tax revenue and deadweight loss.
• B)Compared to the original tax,the smaller tax will increase both tax revenue and deadweight loss.
• C)Compared to the original tax,the larger tax will decrease tax revenue and increase deadweight loss.
• D)Both a and b are correct.

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Definitions:

Undue Influence

A situation in which an individual is able to exert a level of influence over another person, typically in a way that undermines the individual's free will or judgement, often a concern in contract law and wills.

Concealment

The act of hiding or withholding information, objects, or facts intentionally, often to deceive or gain an unfair advantage.

Nondisclosure

The requirement to keep certain information confidential and not share it without proper authorization or consent.

Negligence

The failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation, resulting in harm or damage.