If the Tax on a Good Is Increased from $1

question 133

Multiple Choice

If the tax on a good is increased from $1 per unit to $4 per unit, the deadweight loss from the tax increases by a factor of

• A)5.
• B)9.
• C)16.
• D)24.

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Definitions:

Operating Income

Income earned from a firm's core business operations, excluding deductions of interest and taxes.

Operating Expenses

The costs associated with the day-to-day operations of a business, excluding the costs of goods sold.

Rent Revenue

Income earned from leasing out properties or spaces to tenants.

Periodic Inventory System

An inventory system that updates inventory balances after a specific period, typically using physical counts.