The Amount of Deadweight Loss That Results from a Tax

question 36

Multiple Choice

The amount of deadweight loss that results from a tax of a given size is determined by

• A)whether the tax is levied on buyers or sellers.
• B)the number of buyers in the market relative to the number of sellers.
• C)the price elasticities of demand and supply.
• D)the ratio of the tax per unit to the effective price received by sellers.

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Definitions:

Bilateral Contract

A contract type involving two parties where each promises to perform an act in exchange for the other party's act.

Perfect Tender Rule

A principle in sales law that allows buyers to reject goods if they fail to meet every aspect of the contractual terms.

Material Breach

A significant violation or failure to perform one's duties under a contract, justifying termination by the other party.

Anti-Racism

An active and proactive stance against all forms of racism, promoting policies, actions, and attitudes that challenge racial prejudice and inequality.