The Deadweight Loss from a Tax of $2 Per Unit

question 3

Multiple Choice

The deadweight loss from a tax of $2 per unit will be smallest in a market with

• A)inelastic supply and elastic demand.
• B)inelastic supply and inelastic demand.
• C)elastic supply and elastic demand.
• D)elastic supply and inelastic demand.

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Definitions:

Internal Control

Internal control comprises the procedures and measures a company undertakes to protect assets, ensure accurate financial reporting, and comply with laws and regulations.

Reasonable Assurance

This concept refers to a high level of assurance or confidence in the accuracy of financial statements and internal controls without guaranteeing 100% certainty.

Error Recording

Error recording is the process of documenting mistakes and inaccuracies found in financial statements or transactions to analyze and correct them.

Bank Statement Adjustment

Adjustments made to the bank statement balance to reflect transactions that have not been recorded by the bank, ensuring the balance matches the company's records.