Which of the Following Statements About Taxes Is Incorrect

question 89

Multiple Choice

Which of the following statements about taxes is incorrect?

• A) Taxes in markets always cause deadweight losses.
• B) If the good causes an external cost, taxes actually reduce deadweight loss.
• C) Both taxes and tradeable allowances in a market that has external costs can lead to the efficient quantity.
• D) Taxes on producers cause the supply curve for the product to shift to the left.

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Definitions:

Return On Assets

A financial ratio indicating how efficiently a company uses its assets to generate profit.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's profitability.

Total Assets

The summation of all resources owned by an entity, valued based on historical cost or market value, represented in the balance sheet.

Return On Assets Ratio

The Return on Assets Ratio is a financial metric used to assess how efficiently a company uses its assets to generate profit, calculated by dividing net income by total assets.