With linear demand and supply curves in a market, suppose a tax of $0.20 per unit on a good creates a deadweight loss of $40 . If the tax is increased to $0.50 per unit, the deadweight loss from the new tax will be
a. $200.
b. $250.
c. $475.
d. $625.
b
You might also like to view...
Under the Employment Act of 1946, what action did the federal government take for the first time in U.S. history?
(a) Assuming power and responsibility for managing the world economy (b) Assuming power and responsibility for managing the U.S. economy (c) Relinquishing all influence for managing the U.S. economy to state governments (d) Relinquishing all influence for managing the U.S. economy to the private sector
A fisherman will catch and sell all the fishes in his pond in response to a substantial increase in the price of the fish even if he wishes to remain in the fishing business
a. True b. False Indicate whether the statement is true or false
Under perfect competition, a firm's: a. demand curve and average revnenue curve are identical, but the marginal revenue curve is different. b. demand curve is different, but the average revenue curve and the marginal revenue curve are identical. c. demand curve, average revenue curve and marginal revenue curve are identical
d. none of these is true.
Briefly contrast how firms in a perfectly competitive market will respond to long-run profits and losses. Include an explanation of how each response affects the price level