Assume That for Good X the Supply Curve for a Good

question 12

Multiple Choice

Assume that for good X the supply curve for a good is a typical,upward-sloping straight line,and the demand curve is a typical downward-sloping straight line.If the good is taxed,and the tax is doubled,the

• A)base of the triangle that represents the deadweight loss quadruples.
• B)height of the triangle that represents the deadweight loss doubles.
• C)deadweight loss of the tax doubles.
• D)All of the above are correct.

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Definitions:

Growing Perpetuity

A stream of cash flows that continue indefinitely and grow at a constant rate.

Constant Stream

A series of uninterrupted and consistent flows or payments, often used in the context of financial streams or income over a specific period.

Indefinitely

An undefined period of time without any set end date or limit.

Ordinary Annuity

A sequence of identical disbursements occurring at consecutive periods' conclusion, spanning a determined duration.