Excess burden is the
A. amount by which the burden of a tax exceeds the total revenue collected.
B. differential impact the tax has on high-and low-income groups.
C. ultimate distribution of a tax.
D. shifting of the tax from one burden to another.
Answer: A
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A person buying a used car could ask the seller for permission to take the car to a mechanic for an inspection. If the seller says no, the prospective buyer has gained information about the car. This process is known as:
A. screening. B. internalizing the externality. C. licensing. D. signaling.
The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel
If the market is competitive and unregulated, the equilibrium quantity of steel is ________ tons and the efficient quantity of steel is ________ tons. A) 2; 2 B) 2; 4 C) 4; 2 D) None of the above answers is correct.
When total revenue and price are directly related, demand is
A) unit-elastic. B) inelastic. C) elastic. D) not related.
In Canada, when new demand deposits are created through loans made to Canadians who borrow in order to invest in Canada
a. the Canadian money supply contracts b. excess reserves in Canadian banks are destroyed c. the money supply in Canada remains unchanged but the interest rate decreases favoring the Canadian investor d. the money supply in Canada expands e. the Canadian legal reserve requirement declines