Suppose Jack Values an Ice Cream Sundae at $4

question 212

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) $4, and the deadweight loss comes from both Jack and Dianne.
• B) $4, and the deadweight loss comes only from Jack because he does not buy a sundae after the tax.
• C) $2, and the deadweight loss comes from both Jack and Dianne.
• D) $2, and the deadweight loss comes only from Jack because he does not buy a sundae after the tax.

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Definitions:

Sensitivity

The ability to perceive or be aware of the nuances in emotional cues or stimuli in the environment.

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The understanding and acknowledgment of the roles, behaviors, activities, expectations, and opportunities associated with being male or female in a given society.

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