According to the Classical Concept of Efficiency, an Efficient Tax

question 25

True/False

According to the classical concept of efficiency, an efficient tax should be neutral in its effect on free market allocations of economic resources.

---

Definitions:

Demand Curve

A graph representing the relationship between the quantity of a good consumers are willing and able to purchase and the price of the good.

Supply

The total amount of a specific good or service that is available to consumers at a given price level in a given time period.

Demand

The measure of products or services that consumers are eager and equipped to purchase at varying prices during an established interval.

Increase in Demand

A rise in the quantity of a good or service that consumers are willing and able to purchase at each price point.