The Size of the Deadweight Loss,or Excess Burden,of a Tax

question 205

Multiple Choice

The size of the deadweight loss,or excess burden,of a tax depends on the

• A) amount of producer surplus but not the amount of consumer surplus because it is the producers who send the tax revenues to the government.
• B) strength of demand.
• C) strength of supply.
• D) elasticities of demand and supply.
• E) number of demanders and the number of suppliers.

---

Definitions:

Pharmaceutical Companies

Businesses involved in the research, development, production, and marketing of drugs and medications for medical use.

Automobile Manufacturers

Companies engaged in designing, producing, and selling motor vehicles.

Dry Cleaners

A business that cleans clothing, textiles, and garments using a chemical solvent rather than water, often for items that cannot withstand the rigors of standard home laundering.

Computer-Integrated Manufacturing

A system of manufacturing in which all the processes are controlled by computers, resulting in reduced manual intervention and increased efficiency.