If the Tax on a Good Is Increased from $1

question 347

Multiple Choice

If the tax on a good is increased from $1 per unit to $3 per unit,the deadweight loss from the tax increases by a factor of

• A) 2.
• B) 3.
• C) 9.
• D) 18.

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Definitions:

Supplies Expense

The cost incurred from using or consuming supplies within a business operation.

Accounting Period

A specific time period at the end of which an organization prepares financial statements, commonly a year, quarter, or month.

Adjust

To make modifications to records, accounts, or systems to correct discrepancies or align them with actual conditions.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded on an asset since its purchase.