Examlex

Solved

Suppose That the Equilibrium Quantity in the Market for Widgets

question 188

Multiple Choice

Suppose that the equilibrium quantity in the market for widgets has been 200 per month.Then a tax of $5 per widget is imposed.The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3.The government is able to raise $750 per month in revenue from the tax.What is the deadweight loss from the tax


Definitions:

Interest Rates

Interest rates signify the cost of borrowing money, typically expressed as a percentage of the principal amount loaned.

Inflation Premium

The portion of investment returns that compensates investors for the loss of purchasing power due to inflation.

Yield To Maturity

The overall gain predicted for a bond if it is held all the way to its due date for maturity.

Coupon

The interest rate stated on a bond when issued, which represents the actual amount of interest paid to bondholders.

Related Questions