Which of the Following Statements Correctly Describes the Relationship Between

question 43

Multiple Choice

Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax?

• A)Both the size of the deadweight loss and tax revenue increase.
• B)The size of the deadweight loss increases,but the tax revenue decreases.
• C)The size of the deadweight loss increases,but the tax revenue first increases,then decreases.
• D)Both the size of the deadweight loss and tax revenue decrease.

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Definitions:

Merit Pay Plan

A compensation strategy where employees are paid based on their performance or achievements, often intended to motivate and reward excellence.

Gain-Sharing Plan

A compensation strategy where employees receive financial benefits from improvements in the company's performance, encouraging productivity and team effort.

Skill-Based Pay

A compensation system that determines salaries based on the skills or knowledge an employee possesses, rather than their job position or title.

Compensation Costs

Compensation costs are the total expenses that an employer spends on an employee's wages, benefits, and other forms of remuneration.