When a Tax Is Imposed on Some Good,what Usually Happens

question 114

Multiple Choice

When a tax is imposed on some good,what usually happens to consumer and producer surplus?

• A) They both increase.
• B) They both fall to zero.
• C) They both decrease.
• D) Consumer surplus increases and producer surplus decreases.
• E) Consumer surplus decreases and producer surplus increases.

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Definitions:

Evaluating Management

The process of assessing the effectiveness of a company's management team in achieving business goals and strategies.

Forecasting Profits

The process of estimating the future financial performance of a company, specifically regarding its profits.

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected return, including the possibility of losing some or all of the original investment.

Return

In finance, return refers to the profit or loss generated on an investment over a specific period.