To Measure the Gains and Losses from a Tax on a Good,economists

question 141

Multiple Choice

To measure the gains and losses from a tax on a good,economists use the tools of

• A)macroeconomics.
• B)welfare economics.
• C)international-trade theory.
• D)circular-flow analysis.

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Definitions:

Economic Theory

A framework or model that attempts to explain the workings of economic systems through the analysis of various variables and their relationships.

Option

A financial derivative that gives the buyer the right, but not the obligation, to buy or sell an asset at a specific price on or before a certain date.

Objectively

In a manner that is not influenced by personal feelings or biases, based on factual and unbiased considerations.

Labor

The human effort, both physical and mental, used in the production of goods and services.