For a Good That Is Taxed,the Area on the Relevant

question 41

Multiple Choice

For a good that is taxed,the area on the relevant supply-and-demand graph that represents government's tax revenue is a

• A)triangle.
• B)rectangle.
• C)trapezoid.
• D)None of the above is correct;government's tax revenue is the area between the supply and demand curves,above the horizontal axis,and below the effective price to buyers.

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Definitions:

Sales Taxes

Taxes imposed by governments on the sale of goods and services.

Journal Entry

A record in accounting that notes transactions and changes in financial statements.

Net Pay

The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.

FICA Tax

Federal Insurance Contributions Act tax; a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare.