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

question 48

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 not correct?

• A)Compared to the original tax,the larger tax will increase tax revenue.
• B)Compared to the original tax,the smaller tax will decrease deadweight loss.
• C)Compared to the original tax,the smaller tax will decrease tax revenue.
• D)Compared to the original tax,the larger tax will increase deadweight loss.

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Definitions:

Fixation

In psychology, a persistent focus of the id’s libido on an earlier stage of development, preventing progress through Freud's psychosexual stages.

Psychosexual Stage

a concept in Freudian psychology that describes a series of stages of childhood development in which psychic energy is focused in different erogenous zones.

Oral

Pertaining to the mouth, including aspects related to speech, eating, and the initial stages of digestion.

Anxiety

An emotion characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure, stemming from anticipation of a future concern or threat.