Asked by
Danica Lumaque
on Oct 26, 2024
Verified
An excise tax causes a loss in efficiency because taxes distort incentives.
Excise Tax
A tax on the production, sale, or consumption of a particular good or service within a country.
Efficiency
The optimal use of resources to achieve the best possible outcome or output with the least waste of time and effort.
Distort Incentives
A situation where economic or policy mechanisms result in unintended or undesirable behaviors, often leading to inefficiencies.
- Deconstruct the role of taxes in shaping market behavior, including their effect on deadweight loss and shifts in consumer and producer surplus.
- Comprehend the consequences of particular taxes, including excise taxes, on the efficiency of the market and the well-being of the public.
Verified Answer
AP
Learning Objectives
- Deconstruct the role of taxes in shaping market behavior, including their effect on deadweight loss and shifts in consumer and producer surplus.
- Comprehend the consequences of particular taxes, including excise taxes, on the efficiency of the market and the well-being of the public.
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