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.
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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.
Deadweight loss is the
A. . reduction in total surplus that results from a tax.
B. . loss of profit to businesses when a tax is imposed.
C. . reduction in consumer surplus when a tax is placed on buyers.
D. . decline in government revenue when taxes are reduced in a market.
When the government places a tax on a product
A. . the cost of the tax to buyers and sellers will be less than the revenue raised from the tax by the government.
B. . the cost of the tax to buyers and sellers will equal the revenue raised from the tax by the government.
C. . the cost of the tax to buyers and sellers exceeds the revenue raised from the tax by the government.
D. . without additional information, such as the elasticity of demand for this product, it is impossible to compare tax cost with tax revenue.
Total tax revenue received by government can be expressed as
A. . T/Q.
B. . T+Q.
C. . T×Q.
D. . T-Q.