The Deadweight Loss from a Tax Is Equal to One

question 113

Multiple Choice

The deadweight loss from a tax is equal to one half of

• A) the tax revenue multiplied by consumer surplus.
• B) producer surplus multiplied by consumer surplus.
• C) the decrease in quantity sold multiplied by the tax revenue.
• D) the amount of the tax multiplied by the decrease in quantity sold.
• E) the amount of the tax multiplied by consumer surplus.

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Definitions:

Erie Canal

A man-made waterway completed in 1825 that connected the Great Lakes with the Atlantic Ocean through the Hudson River, significantly impacting trade and settlement in the United States.

Transportation Links

Physical and logistical network connections that facilitate the movement of goods, services, and people from one location to another.

Louisiana Purchase

The acquisition of the Louisiana territory by the United States from France in 1803, dramatically expanding the size of the nation.