Suppose a Tax of $5 Per Unit Is Imposed on a Good

question 137

Multiple Choice

Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300. The deadweight loss from the tax is

• A)$250.
• B)$500.
• C)$750.
• D)$1,000.

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Definitions:

Affiliation Motives

Refer to the innate or learned desire to be associated with other people or groups, often driven by a need for social support, acceptance, and belonging.

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events.

Cannon-Bard Theory

A theory of emotion that proposes that physiological arousal and emotional experience occur simultaneously and independently.

Cognitive Theory

A psychological framework that explores mental processes such as perception, memory, thought, and problem solving to understand behavior.