Figure 18-2 Figure 18-2 Shows a Demand Curve and Two

question 69

Multiple Choice

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

• A) the area adc if the supply curve is S₀ and the area bec if the supply curve is S₁.
• B) the area afcd if the supply curve is S₀ and the area bfce if the supply curve is S₁.
• C) the area becf under either supply curve.
• D) There is no deadweight loss; revenue raised is used to fund government projects.

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