Which of the Following Statements Is Correct

question 14

Multiple Choice

Which of the following statements is correct?

• A)A decrease in the size of a tax always decreases the tax revenue raised by that tax.
• B)A decrease in the size of a tax always decreases the deadweight loss of that tax.
• C)Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward-sloping part of the Laffer curve.
• D)An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve.

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Definitions:

Acetone

A volatile, flammable, and colorless liquid ketone, often used as a solvent in the manufacture of plastics and other industrial products, as well as a nail polish remover.

Tetrahedral Geometry

A shape formed when a central atom is surrounded by four atoms at the corners of a tetrahedron.

Phenol

An organic compound consisting of a benzene ring bonded to a hydroxyl group, used in the manufacture of plastics and pharmaceuticals.

Tetrahedral Geometry

Tetrahedral geometry describes a molecular shape where a central atom is bonded to four other atoms, all at the corners of a tetrahedron, with bond angles of approximately 109.5°.