A tax has a deadweight loss because
A. a. it induces the government to spend more.
B. b. it induces buyers to consume less and sellers to produce less.
C. c. it causes a disequilibrium in the market.
D. d. the loss to buyers is greater than the loss to sellers.
The amount of deadweight loss that will result from a tax is determined by the
A. a. price elasticity of demand and supply.
B. b. number of buyers of the product in the market.
C. c. number of suppliers of the product in the market.
D. d. percentage of the purchase price the tax amounts to.
The size of the tax and the deadweight loss of a tax are
A. a. positively related.
B. b. negatively related.
C. c. independent of each other.
D. d. equal to each other.
The greater the elasticities of demand and supply the
A. a. smaller the deadweight loss from a tax.
B. b. less intrusive a tax will be on a market.
C. c. greater the deadweight loss from a tax.
D. d. more equitable the distribution of a tax between buyers and sellers.