Suppose Jack Values an Ice Cream Sundae at $4

question 219

Multiple Choice

Suppose Jack values an ice cream sundae at $4.Dianne values an ice cream sundae at $6.The pre-tax price of an ice cream sundae is $2.The government imposes a "fat tax" of $3 on each ice cream sundae,and the price rises to $5.The deadweight loss from the tax is

• A) $1.
• B) $2.
• C) $3.
• D) $4.

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Definitions:

GDP Deflator

An economic metric that adjusts the nominal GDP figure to account for changes in price levels, providing a more accurate picture of an economy's size and health over time.

GDP Deflator

A way to measure the cost of all newly made, domestically originated, final goods and services in a country's economic framework.

Inflation Rate

The velocity at which the entirety of goods and services' prices amplifies, draining the monetary capacity to acquire.

GDP Per Person

Gross Domestic Product divided by the population of the country, a measure of the economic output per capita.