In an Otherwise Efficient Market,an Excise Tax Causes ________ Because

question 92

Multiple Choice

In an otherwise efficient market,an excise tax causes ________ because it distorts the relationship between ________.

• A)allocative inefficiency; prices and marginal costs
• B)allocative inefficiency; pre-tax price and the tax price
• C)productive inefficiency; costs and output
• D)market inefficiencies; prices of similar goods
• E)voter resentment; income and ability to pay

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, usually a year or a quarter, highlighting the net profit or loss.

Shareholder Stake

The interest or share that an individual or entity has in the ownership of a company, often expressed as a percentage of the company's stock.

Company Owes

The financial obligations or debts that a business is legally required to repay to creditors, suppliers, or other entities.

Operating Profit

The amount left over from revenue once all costs and expenses are subtracted.