Suppose the Tax on Liquor Is Increased So That the Tax

question 192

Multiple Choice

Suppose the tax on liquor is increased so that the tax goes from being a "medium" tax to being a "large" tax.As a result,it is likely that

• A) tax revenue increases, and the deadweight loss increases.
• B) tax revenue increases, and the deadweight loss decreases.
• C) tax revenue decreases, and the deadweight loss increases.
• D) tax revenue decreases, and the deadweight loss decreases.

---

Definitions:

Organic Groups

Chemically refers to molecules that contain carbon and hydrogen, typically associated with living organisms.

Coenzyme

An organic non-protein compound that binds with an enzyme to catalyze a reaction, essential for the function of many enzymes.

Organic Molecule

A compound containing carbon atoms bonded to hydrogen atoms and often other elements, fundamental to the chemistry of life.

Vitamin

Organic compounds required in small amounts for essential bodily functions and must be obtained through the diet as the body cannot produce them sufficiently.