Suppose a tax of $4 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 2,000 units to 1,700 units. The tax decreases consumer surplus by $3,000 and decreases producer surplus by $4,400 . The deadweight loss of the tax is
a. $200.
b. $400.
c. $600.
d. $1,200.
c
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In the short run, when the prevailing market price falls below the average variable cost curve, a firm in perfect competition will shut down because: a. economic profit is zero
b. price is less than marginal revenue. c. marginal revenue is insufficient to pay average variable cost. d. other firms will enter the market seeking profits.
In contrast to richer countries, most residents of poorer nations will have
a. only some primary education. b. primary and secondary education. c. higher education. d. higher levels of productivity.
You would expect the price of a share of stock to fall if
A. the expected dividend of the stock rose. B. the price level were rising. C. the economy went into recession. D. all of the above.
Answer the following statements true (T) or false (F)
1. The World Bank is the organization to which DVCs turn as a "last-resort" lending agency for projects that private institutions will not fund. 2. One reason why foreign aid is viewed as harmful is that it promotes dependency. 3. One policy recommended by most economists for promoting economic growth in DVCs is the nationalization and protection of domestic industries. 4. One recommended policy that IACs could adopt to help DVCs is to recruit and hire skilled workers from DVCs for businesses in IACs. 5. One effective way that IACs can help DVCs is to lower trade barriers on products produced by DVCs.