What Happens to the Total Surplus in a Market When

question 188

Multiple Choice

What happens to the total surplus in a market when the government imposes a tax?

• A)Total surplus increases by the amount of the tax.
• B)Total surplus increases but by less than the amount of the tax.
• C)Total surplus decreases.
• D)Total surplus is unaffected by the tax.

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Definitions:

Somatic Nervous System

The division of the peripheral nervous system that controls the body’s skeletal muscles. Also called the skeletal nervous system.

Parasympathetic Nervous

Part of the autonomic nervous system responsible for conserving energy and promoting restful states by slowing the heart rate and increasing intestinal and gland activity.

Sympathetic Nervous

The part of the autonomic nervous system that activates the body's stress response, commonly known as the "fight or flight" system.

Homeostasis

A tendency to maintain a balanced or constant internal state; the regulation of any aspect of body chemistry, such as blood glucose, around a particular level.