Consider a Good to Which a Per-Unit Tax Applies

question 25

Multiple Choice

Consider a good to which a per-unit tax applies.The size of the deadweight that results from the tax is smaller,the

• A)less elastic is the demand for the good.
• B)less elastic is the supply of the good.
• C)smaller is the amount of the tax.
• D)All of the above are correct.

---

Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation and a claim on part of the company’s profits.

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders in the form of cash.

Operating Activities

Activities that relate directly to the primary business operations, including revenues and expenses, cash flows, and transactions.

Direct Method

A cash flow statement preparation approach that lists major payments and receipts of cash from operational activities directly.