The Deadweight Loss from a Tax Is Likely to Be

question 55

Multiple Choice

The deadweight loss from a tax is likely to be less with a good that has

• A) few complements.
• B) many substitutes.
• C) few substitutes.
• D) an elastic demand.
• E) an elastic supply.

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Definitions:

Habituated

The process by which an individual becomes accustomed to a stimulus or environment over time, leading to a decrease in responsiveness.

Yerkes-Dodson Law

A psychological principle that asserts there is an optimal level of arousal for the best performance of a task: too little arousal can lead to underperformance, while too much can lead to mistakes.

Simple Tasks

Activities or tasks that require a minimal amount of cognitive or physical effort to complete.

Industrial/Organizational Psychologists

Professionals who apply psychological principles and research methods to improve the workplace environment, productivity, and employee-related issues.