Other Things Equal, for a Given Tax, If the Demand

question 121

Multiple Choice

Other things equal, for a given tax, if the demand curve is more elastic,

• A)​the greater the tax revenue raised and the greater the deadweight cost of the tax.
• B)​the greater the tax revenue raised and the smaller the deadweight cost of the tax.
• C)​the less the tax revenue raised and the greater the deadweight cost of the tax.
• D)​the less the tax revenue raised and the smaller the deadweight cost of the tax.

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Definitions:

Interest on Unpaid Balance

The interest charged on the remaining amount of debt that has not been paid off within a given period.

Equal Monthly Payments

Fixed payments made every month, often used in loans or installment plans to repay the principal and interest.

Amortize

The process of gradually paying off a debt over a period through scheduled payments, which may include interest.

Compounded Monthly

Interest on an investment or loan calculated and added to the principal balance on a monthly basis, allowing it to grow at an accelerated rate.