Suppose Luke Values a Scoop of Italian Gelato at $4

question 71

Multiple Choice

Suppose Luke values a scoop of Italian gelato at $4. Leia values a scoop of Italian gelato at $6. The pre-tax price of a scoop of Italian gelato is $2. The government imposes a "fat tax" of $3 on each scoop of Italian gelato, and the price rises to $5. The deadweight loss from the tax is

• A)$4, and the deadweight loss comes from both Luke and Leia.
• B)$4, and the deadweight loss comes only from Luke because he does not buy gelato after the tax.
• C)$2, and the deadweight loss comes from both Luke and Leia.
• D)$2, and the deadweight loss comes only from Luke because he does not buy gelato after the tax.

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Definitions:

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The rivalry among businesses or individuals for resources, recognition, or market dominance, which can drive innovation and efficiency.

Land and Freedom

Can refer to a political or social movement advocating for land reform, or the title of various historical works and movements seeking equitable distribution of land.

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A revolutionary is an individual or group that advocates for or participates in a dramatic and significant change, particularly in political, social, or economic structures.