If the Tax on a Good Is Increased from $0

question 403

Multiple Choice

If the tax on a good is increased from $0.15 per unit to $0.60 per unit,the deadweight loss from the tax

• A) remains constant.
• B) increases by a factor of 4.
• C) increases by a factor of 9.
• D) increases by a factor of 16.

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Definitions:

Controlled Substances

Drugs or chemicals whose manufacture, possession, and use are regulated by the government due to potential for abuse and addiction.

U.S. Drug Enforcement Agency

A federal law enforcement agency tasked with combating drug smuggling and use within the United States.

Double-Locked Area

A secure storage method or place where highly restricted or controlled substances and items are kept, requiring two locks or barriers to access.

Childproof Safety Locks

Safety devices designed to prevent children from opening cabinets, doors, or windows, reducing the risk of accidents or ingesting hazardous substances.