Figure 8-19 the Vertical Distance Between Points a and B Represents the Represents

question 56

Multiple Choice

Figure 8-19
The vertical distance between points A and B represents the original tax.
-Refer to Figure 8-19.The original tax can be represented by the vertical distance AB.Suppose the government is deciding whether to lower the tax to CD or raise it to FG.Which of the following statements is correct?

• A)Compared to the original tax,the larger tax will decrease both tax revenue and deadweight loss.
• B)Compared to the original tax,the smaller tax will increase both tax revenue and deadweight loss.
• C)Compared to the original tax,the larger tax will decrease tax revenue and increase deadweight loss.
• D)Both a and b are correct.

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Definitions:

Communal Sharing

A relationship or interaction model based on shared resources and collective benefit.

Collective Identity

A shared sense of belonging to a group, characterized by common interests, experiences, or values.

Unity

The state of being united or joined as a whole, especially among members of a group with common interests.

Market Pricing Relationship

A theoretical relationship that determines the price of goods or services in a market based on supply and demand, competition, and other economic factors.