For a Good That Is Taxed, the Area on the Relevant

question 121

Multiple Choice

For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is

• A)smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax.
• B)bounded by the supply curve, the demand curve, the effective price paid by buyers, and the effective price received by sellers.
• C)a right triangle.
• D)a triangle, but not necessarily a right triangle.

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Definitions:

Redistributive Exchange

An economic system where goods or resources are collected from a group and then distributed based on a specific set of criteria.

Tribute

Payment made periodically by one state or ruler to another, especially as a sign of dependence or submission.

Political Organization

The way power, as the capacity to do something, is accumulated, arranged, executed, and structurally embedded in society; the means through which a society creates and maintains social order and reduces social disorder.

Uncentralized Political System

A form of governance where power or legal authority is dispersed among various levels of government or organizations rather than being centralized in a single authority.