The Net Loss to Society from a Tax on a Product

question 47

Multiple Choice

The net loss to society from a tax on a product can be measured as:​

• A)​the loss in consumer surplus.
• B)​the loss in producer surplus.
• C)​the loss in both consumer and producer surplus.
• D)​the difference between the loss in consumer and producer surplus and the gain in tax revenue.

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Definitions:

Continuity/Discontinuity

A fundamental issue concerning the process of development that addresses the extent to which development tends to be continuous, consisting of the gradual accumulation of small changes, and the extent to which it is discontinuous, involving a series of abrupt, radical transformations.

Development

The process of growth or progress, often marked by a series of changes or stages, in the context of individuals, societies, or organisms.

Gradual

describes a process happening in small degrees, steps, or stages over a period, rather than suddenly.

Continuous Process

An operation or production system where input materials are continuously fed and processed, resulting in a continuous output.