Which of the Following Statements Is True About Taxes

question 8

Multiple Choice

Which of the following statements is true about taxes?

• A) Government revenue from a tax is always greater than the loss of producer surplus and consumer surplus.
• B) Taxes always create more deadweight loss than do price ceilings and price floors.
• C) Taxes decrease both consumer surplus and producer surplus while creating a deadweight loss.
• D) Both answers A and C are correct.

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Definitions:

Mean

The mathematical average of a set of numbers, calculated by adding them together and dividing by the number of terms in the set.

Descriptive Statistics

Statistical methods that summarize and organize the characteristics of a dataset, including measures like mean, median, mode, and standard deviation.

Range

The difference between the highest and lowest scores in a set of data, indicating the spread of scores.

p < .05

A statistical term indicating that the probability of the observed data, or more extreme, if the null hypothesis were true, is less than 5%, often used as a threshold for statistical significance.