The figure above shows a tax imposed on a good with an external cost. The area of the rectangle abcd equals
A) the MSB.
B) the total tax revenue collected by the government.
C) the amount of pollution tax per ton.
D) the MC.
E) the deadweight loss.
B
You might also like to view...
Suppose the market for cement is one where there are a large number of buyers and sellers, and everyone conducts transactions at a common market price. Which of the following statements is true about the structure of the cement market?
A) The cement market is free and competitive. B) The cement market is government regulated. C) All participants in the cement market set their own prices. D) All transactions in the cement market are likely to be involuntary.
If you were building a macroeconomic model that explores the effect of an increase in income tax rates on the size of the labor force, the endogenous variable(s) would be
A) income tax rates. B) the size of the labor force. C) both income tax rates and the size of the labor force. D) neither income tax rates nor the size of the labor force.
Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat. Which of the following will occur as a result of these simultaneous events?
A) Both the market clearing price and equilibrium quantity will rise. B) The market clearing price will fall, but the equilibrium quantity will rise. C) The market clearing price may rise, fall, or stay the same, but the equilibrium quantity will rise. D) The market clearing price will fall, but the equilibrium quantity may rise, fall, or stay the same.
When the loanable funds and foreign exchange markets are in equilibrium,
a. there are no leakages from the circular flow of income. b. macro equilibrium cannot occur. c. the leakages from the circular flow will equal the injections into it. d. injections into the circular flow will exceed leakages from it.