-Refer to the Above Figure $P _ { 2 }$ - $\mathrm { P } _ { 0 }$

question 27

Multiple Choice

-Refer to the above figure.A unit tax has been placed on the good.The consumer pays what amount of the tax?

• A)None of the tax.
• B) \(P _ { 2 }\) - \(\mathrm { P } _ { 0 }\)
• C) \(P _ { 2 }\) - \(P _ { 1 }\)
• D) \(P _ { 1 }\) - \(\mathrm { P } _ { 0 }\)

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Definitions:

Benefits-received Principle

This principle suggests that individuals should pay taxes in proportion to the benefits they receive from government services.

Taxation

The process by which a government imposes charges on citizens and corporate entities to finance government spending and public services.

Gasoline Tax

A tax imposed by governments on the sale of gasoline, typically used to fund transportation-related projects.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to tax, resulting in taxpayers paying the same percentage of their income regardless of the income level.