Which of the Following Outcomes Is NOT a Result of a Tax

question 385

Multiple Choice

Which of the following outcomes is NOT a result of a tax imposed on sellers of gasoline?

• A) Supply decreases, a deadweight loss is created, and the price rises.
• B) The market becomes less efficient and the government collects the tax revenue.
• C) Demand does not change, the price rises, and consumer surplus decreases.
• D) Demand decreases, the market becomes more efficient, and the price rises.

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Definitions:

Physical Units Method

An inventory costing method that allocates expenses based on the physical units produced or available, commonly used for homogeneous products.

Actual Physical Units

Actual physical units refer to the tangible quantity of items produced, held in inventory, or sold, as measured by physical count.

Joint Costs

Costs that are incurred in the process of producing two or more products simultaneously and cannot be easily separated for each product.

Market Value at Split-Off Method

A method used in accounting to allocate joint costs among products on the basis of their respective market values at the point where they are separable or split-off.