For a Good That Is Taxed, the Area on the Relevant

question 121

Multiple Choice

For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is

• A)smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax.
• B)bounded by the supply curve, the demand curve, the effective price paid by buyers, and the effective price received by sellers.
• C)a right triangle.
• D)a triangle, but not necessarily a right triangle.

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Definitions:

Control Procedure

A set of standardized practices and procedures implemented by a business to ensure accuracy and integrity in its financial and operational activities.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 that aims to protect investors by making corporate disclosures more reliable and accurate through the establishment of new or enhanced standards for all U.S. public company boards, management, and public accounting firms.

Internal Control Procedures

These are policies and procedures implemented by a business to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Public Companies

Companies that issue publicly traded debt or equity securities.