As the Tax on a Good Increases from $1 Per

question 191

Multiple Choice

As the tax on a good increases from $1 per unit to $2 per unit to $3 per unit and so on,

• A)the tax revenue increases at first, but it eventually peaks and then decreases.
• B)the deadweight loss increases at first, but it eventually peaks and then decreases.
• C)the tax revenue always increases and the deadweight loss always increases.
• D)the tax revenue always decreases and the deadweight loss always increases.

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Definitions:

ANOVA

Acronym for Analysis of Variance, a statistical technique used to compare the means of three or more samples.

5 × 4 Factorial ANOVA

A type of factorial analysis of variance that involves two independent variables with 5 levels for the first and 4 levels for the second, analyzing the effect of these variables on a dependent variable.

Subjects

Individuals or entities that participate in a research study.

4 × 3 Factorial ANOVA

A type of factorial ANOVA test with two independent variables, one at 4 levels and the other at 3 levels, to examine their effects on a dependent variable.