When the Government Imposes an Excise Tax in the Market

question 128

Multiple Choice

When the government imposes an excise tax in the market, the resulting deadweight loss will:

• A)equal the tax revenue paid to the government.
• B)be greater than the tax revenue paid to the government.
• C)be less than the tax revenue paid to the government.
• D)represent the inefficiency from transactions that do not occur as a result of the tax.

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Definitions:

Trusts

Legal arrangements where one party holds property or assets on behalf of another party, often used for the purpose of managing, protecting, or passing on wealth or property.

Production

The act of blending various tangible and intangible inputs, including designs and know-how, to create an end product for use.

Oligopolists

Firms within a market structure where a small number of companies have significant market control.

Collude

To cooperate secretly or illegally with others, typically to deceive or gain an unfair advantage.