A Tax That Creates an Excess Burden May Nevertheless Improve

question 34

Multiple Choice

A tax that creates an excess burden may nevertheless improve efficiency if

• A)consumption of the good has been generating beneficial externalities.
• B)consumption of the good has been generating no externalities.
• C)consumption of the good has been generating detrimental externalities.
• D)the good has been supplied by a monopolist.

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Definitions:

Duty of Disclosure

The legal obligation to provide all relevant information in a transaction or legal proceeding, ensuring fairness and transparency.

Salesperson and Customer

The dynamic relationship between an individual who sells goods or services and the individual or entity purchasing them, emphasizing the communication and transaction between these parties.

Business Partners

Individuals or entities who collaborate and share the risks and profits of a business venture.

Nonfraudulent Misrepresentation

A false statement of fact made honestly but inaccurately, leading to a disadvantageous contractual agreement without intent to deceive.