Other Things Equal, for a Given Tax, If the Demand

question 121

Multiple Choice

Other things equal, for a given tax, if the demand curve is more elastic,

• A)​the greater the tax revenue raised and the greater the deadweight cost of the tax.
• B)​the greater the tax revenue raised and the smaller the deadweight cost of the tax.
• C)​the less the tax revenue raised and the greater the deadweight cost of the tax.
• D)​the less the tax revenue raised and the smaller the deadweight cost of the tax.

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Definitions:

Overapplied Overhead

A situation where the overhead allocated to products or services is more than the actual overhead incurred.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor directly used to create the goods.

Indirect Materials

Materials used in the production process that cannot be directly traced to the end product, often considered part of manufacturing overhead.

Production

The process of creating goods and services, involving labor, raw materials, and machinery.