What Results When Taxes Are Imposed on a Commodity

question 181

Multiple Choice

What results when taxes are imposed on a commodity

• A)There is never a deadweight loss.
• B)Some consumers alter their consumption by not purchasing the taxed commodity.
• C)Tax revenue will rise by the amount of the tax multiplied by the before-tax level of consumption.
• D)Taxes will make the consumers who purchase the commodity worse off but not the consumers who do not purchase the commodity.

---

Definitions:

Sample Variance

A measure of the dispersion or spread of data points in a sample, calculated by taking the average of the squared differences from the mean.

Central Limit Theorem

A statistical theory stating that the distribution of sample means will approximate a normal distribution as the sample size becomes large, regardless of the population's distribution.

Statistical Analyses

The process of collecting, summarizing, and interpreting data to discover patterns and test hypotheses.

T-distribution

A probability distribution that arises when estimating the mean of a normally distributed population in situations where the sample size is small, and the population standard deviation is unknown.