The Excess Burden or Deadweight Loss of a Tax Refers

question 268

Multiple Choice

The excess burden or deadweight loss of a tax refers to the

• A) increase in product price as a result of the tax.
• B) growth in government funded programs as a result of the revenue generated by the tax.
• C) loss of disposable income consumers suffer from the tax.
• D) reduction in gains from mutually beneficial exchanges that are eliminated as a result of the tax.

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Definitions:

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the cultivation and production of peanuts, a leguminous plant valued for its edible seeds.

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The total expense involved in purchasing, operating, and maintaining a machine over its useful life.

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Sliced pieces of potatoes that are deep-fried and often served as a side dish.

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The process of converting biomass and crops into ethanol, a renewable fuel.