In What Way Is the Result of an Excise Tax

question 18

Multiple Choice

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?

• A) The amount that consumers pay for the good will be less than they previously paid
• B) The amount of the good that will be traded in the market will be greater than previously traded
• C) both price floors and excise taxes create excess demand
• D) The amount that consumers pay for the good will be greater than they previously paid
• E) Both price floors and excise taxes create excess supply

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Definitions:

Underapplied Factory Overhead

The amount of actual factory overhead in excess of the factory overhead applied to production during a period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead expenses.

Inventory Accounts

Accounts used to track the quantity and value of products a company holds for the purpose of sale, broken down into categories like raw materials, work-in-progress, and finished goods.

Manufacturing Firm

A company that produces goods through the process of raw materials using labor and machinery.