Which Statement About Taxes Is INCORRECT

question 89

Multiple Choice

Which statement about taxes is INCORRECT?

• A) Taxes in markets always cause deadweight losses.
• B) If the good causes an external cost, taxes actually reduce deadweight loss.
• C) Both taxes and tradable allowances in a market that has external costs can lead to the efficient quantity.
• D) Taxes on producers cause the supply curve for the product to shift to the left.

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Definitions:

Probability Distribution

A function used in math to estimate the chances of various outcomes in an experimental setup.

Textile Industry

A sector of the economy concerned with the production of yarn, cloth, and the subsequent design or manufacture of clothing and their distribution.

Blemishes

Imperfections or marks on a surface or object that affect its appearance or quality.

Random Variable

A variable that varies based on the results of a chance event.