A Tax That Imposes a Small Excess Burden Relative to the Tax

question 204

Multiple Choice

A tax that imposes a small excess burden relative to the tax revenue that it raises is

• A)a payroll tax.
• B)a sin tax.
• C)an efficient tax.
• D)a FICA tax.

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Definitions:

Experience

The knowledge or mastery of an event or subject gained through involvement in or exposure to it.

Productivity

The measure of the efficiency of production often calculated as the ratio of outputs produced to inputs used in the production process.

Constant Returns To Scale

Constant returns to scale occur when a proportional increase in all inputs leads to an equal proportional increase in output, implying efficiency in production.

Human Capital

Abilities, insights, and practice held by a person or community, seen through the lens of their contribution or expenditure to a corporation or state.