When a Tax Is Imposed on a Good or a Service,the

question 206

Multiple Choice

When a tax is imposed on a good or a service,the marginal benefit of the last unit bought ________ the marginal cost of the last unit.

• A) is equal to
• B) is greater than
• C) is less than
• D) None of the above answers is correct because there is no consistent relationship between the marginal benefit of the last unit and its marginal cost.
• E) is not able to be compared to

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