Author Question: A tax on a product causes a deadweight loss because: a. some consumer surplus is transferred from ... (Read 73 times)

NClaborn · **on:** Jun 30, 2018

A tax on a product causes a deadweight loss because:
a. some consumer surplus is transferred from buyers to producers.
b. some producer surplus is transferred from producers to consumers.
c. some consumer and producer surplus is transferred to the government.
d. it distorts the incentives of producers and consumers so that the efficient level of output is not produced.

Question 2

In many less-developed countries, per capita GDP falls even though real GDP rises, because:
a. output grows at a slower rate than the population.
b. the GDP measures in developing countries are always inaccurate.
c. consumption spending exceeds investment spending.
d. these countries face an acute trade deficit.
e. prices increase faster than an increase in actual output level.