There Is No Deadweight Loss from a Tax

question 30

Multiple Choice

There is no deadweight loss from a tax:

• A) only if demand is perfectly elastic.
• B) only if supply is perfectly inelastic.
• C) if either demand or supply is perfectly elastic.
• D) if either demand or supply is perfectly inelastic.

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Definitions:

Financing Activities

Activities relating to raising money from investors and creditors such as the issuance of stocks and bonds and long-term notes; also, repurchase of outstanding stock and retiring bonds and notes as well as paying dividends.

Retained Earnings Activities

The portion of net income left over for the business after it has paid out dividends to its shareholders, often reinvested into the business or kept as a reserve.

Operating Revenue

Income earned from a company's core business operations, excluding revenue from non-operating sources like investments.

Operating Activities

Involves the primary revenue-generating activities of an organization, such as sales and services, as reflected in its cash flow.