The Decrease in Total Surplus That Results from a Market

question 195

Multiple Choice

The decrease in total surplus that results from a market distortion, such as a tax, is called a

• A)wedge loss.
• B)revenue loss.
• C)deadweight loss.
• D)consumer surplus loss.

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Definitions:

Machine Hours

A measure of the amount of time a machine is operated, used to allocate machine costs to products or job orders.

Single Plantwide Rate

A method of allocating manufacturing overhead to products using one uniform overhead rate throughout the entire plant or factory.

Product B

A generic term used to refer to a particular product or category of products being discussed or analyzed.

Estimated Overhead

An approximation of the ongoing operational costs not directly tied to production, used for budgeting and pricing.