Author Question: The excess burden of a tax is: a. the amount by which the price of a good increases. b. the loss ... (Read 46 times)

asmith134 · **on:** Jul 1, 2018

The excess burden of a tax is:
a. the amount by which the price of a good increases.
b. the loss of consumer and producer surplus that is not transferred to the government.
c. the amount by which a person's after-tax income decreases as a result of the new tax.
d. the welfare costs to firms forced to leave the market due to an inward shift of the demand curve.

Question 2

Appendix: Winning an auction can be exhilarating, but it can also lead to doubt as to whether you did the right thing or not. This is called:
a. The regret effect.
b. Moral hazard.
c. Second wind.
d. The winner's curse.