When tastes are quasilinear, the sole reason for the deadweight loss from a per-unit tax is that output falls under the tax.
Answer the following statement true (T) or false (F)
True
Rationale: When tastes are quasilinear, we only have substitution effects in the demand curve -- and the inefficiency on the consumer side arises from the reduction in output.
You might also like to view...
The perfectly competitive firm's total revenue curve
A) is linear and upward sloping. B) has a constant slope. C) has a positive slope. D) all of the above.
An ideal voting system will not function if a ________ is present, and has the power to enact his or her own preferences.
A. bully B. representative C. dictator D. consul
Which of the following countries is part of the ERM but NOT part of the Eurozone?
A) France B) Italy C) Spain D) Denmark
Refer to the above graph, which shows the market for beef where demand shifted from D 1 and D 2. The change in equilibrium from E1 to E 2 is most likely to result from:
a. A decrease in consumer incomes b. An increase in the price of pork c. A decrease in the tax on beef products d. An increase in the cost of cattle feed