Mary Values a Movie at $15 While Tim Values It

question 171

Multiple Choice

Mary values a movie at $15 while Tim values it at $10.The price of the movie is $9.If the government imposes a $2 tax per movie and the price of a movie rises to $11,what part of the deadweight loss comes from Mary and what part comes from Tim?

• A) none comes from Mary, $1 comes from Tim
• B) none comes from Mary, $3 comes from Tim
• C) $2 comes from Mary, $1 comes from Tim
• D) $4 comes from Mary, $3 comes from Tim