What is the Excise Tax? - Definition & Overview

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which is an example of an excise tax?

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1. The price of winter heating oil is price inelastic. This means that_____

2. What is an example of negative public externality?

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About This Quiz & Worksheet

When a specific behavior is considered negative (smoking, drinking alcohol, polluting, etc.), public officials may enact a tax to reduce its occurrence. This policy is referred to as an excise tax. To successfully pass this quiz, you will need an understanding of this form of taxation and how it relates to public policy.

Quiz & Worksheet Goals

To enhance your knowledge of excise taxes, you will be quizzed on your understanding of:

  • The definition and justification of excise taxes
  • Price elasticity and inelasticity
  • Negative public externalities

Skills Practiced

  • Critical thinking - apply the concept of excise taxes to potential scenarios involving negative behavior
  • Define key concepts - ensure that you can accurately define primary terms, such as negative public externalities and price elasticity
  • Making connections - connect the concept of excise taxes with everyday events and public policy

Additional Learning

Study the lesson entitled What is the Excise Tax? Definition & Overview to learn more about this type of taxation. The lesson's topics include:

  • Differentiating the excise tax from other forms of taxation, such as sales tax
  • Why the excise tax is considered a public policy option for addressing a negative behavior
  • How effective an excise tax can be based on the price of the good and service
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