Which of the Following Would Likely Have the Smallest Deadweight

question 52

Multiple Choice

Which of the following would likely have the smallest deadweight loss relative to the tax revenue?

• A)a head tax (that is,a tax everyone must pay regardless of what one does or buys)
• B)an income tax
• C)a tax on compact discs
• D)a tax on caviar

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Definitions:

No-Par

Refers to stock issued without a par value, meaning it has not been assigned a nominal face value.

Market Value

The ongoing rate at which one can buy or sell an asset or service.

Weighted-Average

A method of calculating an average that takes into account the importance, or weight, of each value.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.