In the Short Run,specific Taxes on a Firm Result in

question 14

Multiple Choice

In the short run,specific taxes on a firm result in

• A)price increases that may not persist in the long run.
• B)an increase in consumer surplus because the tax permits spending in additional government services.
• C)shortages of the good being taxed.
• D)an increase in producer surplus because of the rise in price.

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Definitions:

Operating Cycle

The time it takes for a company to purchase inventory, sell products, and collect cash from customers.

Classified Balance Sheet

A balance sheet that organizes assets and liabilities into subcategories like current and long-term.

Unclassified Balance Sheet

A balance sheet that presents assets and liabilities without categorizing them into long-term or short-term classifications.

Current Ratio

A company's short-term financial health, specifically its ability to settle obligations due within a year, is gauged by this ratio, which is the quotient of current assets and current liabilities.