Which of the Following Events Is a "Casualty" Loss

question 53

Multiple Choice

Which of the following events is a "casualty" loss?
I.Lightning damage.
II.Loss of the topsoil on a farm from a flood.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Efficiency Loss

Reductions in combined consumer and producer surplus caused by an underallocation or overallocation of resources to the production of a good or service. Also called deadweight loss.

Perfectly Inelastic

A situation where the demand or supply for a good or service remains unchanged regardless of changes in its price.

Excise Tax

Is a tax applied on the sale or production for sale of specific goods within a country.

Incidence

Refers to how the burden of a tax is distributed between buyers and sellers in the market.