Suppose That Policymakers Are Considering Placing a Tax on Either

question 7

Multiple Choice

Suppose that policymakers are considering placing a tax on either of two markets.In Market A,the tax will have a significant effect on the price consumers pay,but it will not affect equilibrium quantity very much.In Market B,the same tax will have only a small effect on the price consumers pay,but it will have a large effect on the equilibrium quantity.Other factors are held constant.In which market will the tax have a larger deadweight loss?

• A)Market A
• B)Market B
• C)The deadweight loss will be the same in both markets.
• D)There is not enough information to answer the question.

---

Definitions:

Pedophiles

Adults who are sexually attracted to prepubescent children, which is a psychiatric disorder and subject to legal consequences.

Unpredictability

The quality of being unable to be predicted or foreseen, often leading to a sense of uncertainty or variability in outcomes.

Stressful

Characterized by or causing stress or anxiety.

Thalamus

The thalamus is a small structure within the brain that serves as a relay station for information between the rest of the brain and the body, playing a key role in processing sensory information and regulating consciousness.