Figure 8-19 the Vertical Distance Between Points a and B Represents the Represents

question 20

Multiple Choice

Figure 8-19
The vertical distance between points A and B represents the original tax.
-Refer to Figure 8-19.If the government changed the per-unit tax from $5.00 to $2.50,then the price paid by buyers would be $7.50,the price received by sellers would be $5,and the quantity sold in the market would be 1.5 units.Compared to the original tax rate,this lower tax rate would

• A)increase government revenue and increase the deadweight loss from the tax.
• B)increase government revenue and decrease the deadweight loss from the tax.
• C)decrease government revenue and increase the deadweight loss from the tax.
• D)decrease government revenue and decrease the deadweight loss from the tax.

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Definitions:

Cash Dividends

These are payments made by a company out of its profits to its shareholders, usually in the form of cash.

Cash Flow

The sum of funds being moved into and out of a company, particularly in relation to its cash flow.

Financing Activities

All transactions (other than interest payments) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners.

Cash Flow

The total amount of money being transferred into and out of a business, measuring its financial health.