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