When a Good Is Taxed

question 56

Multiple Choice

When a good is taxed,

• A)both buyers and sellers of the good are made worse off.
• B)only buyers are made worse off, because they ultimately bear the burden of the tax.
• C)only sellers are made worse off, because they ultimately bear the burden of the tax.
• D)neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.

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Definitions:

Cerebral Hemisphere

One of the two parts of the brain, divided by the longitudinal fissure, that are responsible for different functions.

Cortex

The outer layer of the cerebrum in the brain, involved in various high-level brain functions such as thought, memory, and consciousness.

Lobes

Divisions of the brain or other organs marked by natural boundaries, such as the frontal, parietal, temporal, and occipital lobes of the brain.

Myelin Sheath

A fatty layer that surrounds nerve fibers, providing insulation and increasing the speed at which electrical impulses propagate along the nerve cells.