The excess burden of a tax is:
a. the amount by which the price of a good increases.
b. the loss of consumer and producer surplus that is not transferred to the government.
c. the amount by which a person's after-tax income decreases as a result of the new tax.
d. the welfare costs to firms forced to leave the market due to an inward shift of the demand curve.
b
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Which one of the following is not a characteristic of a perfectly competitive market? a. Firms advertise in order to distinguish their products and increase market share. b. Firms earn zero economic profit in the long run
c. Competing products are virtually identical. d. Firms are price takers.
Monetary policy affects real GDP by.
A. Changing aggregate supply B. Creating budget surpluses C. Changing aggregate demand D. Creating budget deficit
A full-time student who did not have a job and was not looking for work would be categorized as
What will be an ideal response?
A disadvantage of a market economy is:
a. basic services for all citizens are not provided b. there is great motivation to create new goods and services c. the economy can change direction quickly and drastically d. citizens have the freedom to choose their employers