Which of the Following Events Is Consistent with an Increase

question 29

Multiple Choice

Which of the following events is consistent with an increase in the deadweight loss of the gasoline tax from $30 million to $120 million?

• A)The tax on gasoline increases from $0.30 per gallon to $0.45 per gallon.
• B)The tax on gasoline increases from $0.30 per gallon to $0.60 per gallon.
• C)The tax on gasoline increases from $0.25 per gallon to $0.45 per gallon.
• D)The tax on gasoline increases from $0.25 per gallon to $1.00 per gallon.

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Definitions:

Accounts Receivable

Accounts receivable refers to the amount of money that customers owe to a company for goods or services that have been delivered but not yet paid for.

Cash

Liquid currency and assets readily convertible into cash, used to fund day-to-day operations and transactions.

Liquidity

A measure of how easily assets can be converted into cash without losing value.

Obligations

Responsibilities or duties bound by law or contract that one party owes another, including the repayment of debts or fulfilling contractual agreements.