The Deadweight Loss of a Tax Is the Reduction in Total

question 115

True/False

The deadweight loss of a tax is the reduction in total surplus in excess of the tax revenue collected that results from the tax.

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Definitions:

Bushels

A unit of volume that is used in the United States for measuring agricultural products, such as grains.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input used, holding all other inputs constant.

Total Product Curve

A graphic representation showing how the total quantity of output of a firm changes as the quantity of an input is changed, holding all other inputs constant.

Marginal Product

The increase in output that results from adding one more unit of a specific input, holding all other inputs constant.