Suppose an Excise Tax Is Imposed on Luxury Boats and Yachts

question 182

Multiple Choice

Suppose an excise tax is imposed on luxury boats and yachts. Economists argue that such a tax

• A)is sure to be vertically equitable, since buyers of luxury boats and yachts are wealthy.
• B)entails no deadweight loss as long as buyers of boats and yachts can easily substitute one luxury good for another.
• C)violates the benefits principle of taxation.
• D)may burden workers in the luxury-boat-and-yacht industry more than it burdens the buyers of luxury boats and yachts.

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Definitions:

Five-Figure Accuracy

A level of precision where a numerical value is rounded to the nearest ten-thousandth place, representing the first five significant digits.

Terminating Decimal

A decimal fraction that has a finite number of digits after the decimal point.

Five-Figure Accuracy

A level of precision in numerical calculations or measurements where the result is accurate to five digits.

Four-Figure Accuracy

A level of precision in numerical representations where the number is rounded or truncated to four significant digits.