From the Standpoint of Efficiency,imposing a Tax on the Income

question 246

Multiple Choice

From the standpoint of efficiency,imposing a tax on the income from what type of resource is best because it creates the least inefficiency?

• A) a resource with a perfectly elastic supply
• B) a resource with a perfectly elastic demand
• C) a resource that earns a high reward
• D) a resource with a fixed supply
• E) a resource that earns a low reward

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Definitions:

Operating Revenues

The income earned from a company's primary business activities, excluding one-time or unusual expenses or incomes.

Variable Operating Costs

Expenses that vary in direct proportion to the level of production or sales volume.

Fixed Operating Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.