Economic Theory

question 122

Multiple Choice

Economic theory

• A)is a deliberate simplification of factual relationships.
• B)seeks to disprove a hypothesis.
• C)is based mainly on assumptions.
• D)seeks to prove political ideals.

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Definitions:

Deadweight Loss

An economic inefficiency that happens when the balance between supply and demand for a good or service isn't met or can't be met.

Tax

A mandatory monetary fee or tax levied by the government on people or organizations to support government spending.

Per Unit Tax

A tax that is levied on a per unit basis, typically imposed on specific goods or services.

Price Increase

A rise in the cost of goods or services.