One Tax System Is Less Efficient Than Another If It

question 140

Multiple Choice

One tax system is less efficient than another if it:

• A)places a lower tax burden on lower income families than on higher income families
• B)places a higher tax burden on lower income families than on higher income families
• C)raises the same amount of revenue at a higher cost to taxpayers
• D)raises the same amount of revenue at a lower cost to taxpayers

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Definitions:

Consumer Surplus

The rift between the financial input consumers are willing to make for acquiring a good or service and the actual amount they spend.

Demand

Represents the quantity of a good or service that consumers are willing and able to purchase at various prices over a given period.

Consumer Surplus

The contrast between the overall amount consumers are willing to pay for a good or service and the total they actually pay.

Supply

The total amount of a good or service that producers are willing and able to sell at a given price over a certain period.