When the Size of a Tax Is Doubled, the Deadweight

question 22

Multiple Choice

When the size of a tax is doubled, the deadweight loss from the tax:

• A)increases by the size of the tax
• B)doubles
• C)remains constant
• D)increases by four times

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Definitions:

Global Transmission

The worldwide spread or transfer of cultures, diseases, information, technologies, and other phenomena.

Industrial Capitalism

An economic system characterized by private or corporate ownership of capital goods, production for profit, and competitive markets.

Market

A system or environment where buyers and sellers interact to exchange goods, services, or information.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.