The Efficiency Loss of a Tax Is

question 207

Multiple Choice

The efficiency loss of a tax is

• A) the net value of sacrificed output caused by the tax.
• B) that portion of the tax paid by producers minus the portion paid by consumers.
• C) that portion of the tax paid by consumers minus the portion paid by producers.
• D) the total tax revenue minus the output loss caused by the tax.

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Definitions:

Zero-Factor Property

The rule stating if a product of two or more factors is zero, at least one of the factors must be zero.

Equation

A pronouncement in mathematics asserting the equivalence of two expressions.

Factored Form

An expression represented as the product of its factors.

Constructed Figure

A geometric shape that is drawn or created using specific rules or tools.