The Tax on Gasoline

question 488

Multiple Choice

The tax on gasoline

• A)reduces efficiency by causing large deadweight losses.
• B)reduces efficiency by decreasing consumer surplus and producer surplus.
• C)enhances efficiency by serving as a corrective device in a market with positive externalities.
• D)enhances efficiency by serving as a corrective device in a market with negative externalities.

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Definitions:

Standard Price

A predetermined cost assigned to materials, labor, and overhead, used in budgeting and variance analysis.

Revenue Volume Variance

This reflects the difference between actual revenue and the expected revenue that was based on the budget, often attributed to changes in sales volume.

Planned Selling Price Sep## Actual Units Sold

This represents the comparison between the pre-established price at which goods were intended to be sold and the actual number of units sold.

Significant Variances

Major discrepancies between planned and actual figures in budgets, costing, or any financial metric.