What Do Subsidies and Commodity Taxes Have in Common

question 2

Multiple Choice

What do subsidies and commodity taxes have in common?

• A) In both cases, who the policy mainly affects depends on who is assigned the tax or subsidy.
• B) Both policies create inefficient increases in trade.
• C) Both policies have a greater impact on the side of the market with the more inelastic curve.
• D) Both policies decrease deadweight loss.

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Definitions:

Hallucination

A hallucination is a perception in the absence of external stimulus that has qualities of real perception, often involving seeing, hearing, or feeling something that isn't there.

Compulsion

An urge or force that drives an individual to perform repetitive behaviors or rituals, often as a way of relieving anxiety.

Psychological Disorders

Mental health conditions characterized by alterations in thinking, mood, or behavior associated with distress and/or impaired functioning.

Stereotype

A fixed, overgeneralized belief about a particular group or class of people.