Suppose a Tax of $0

question 59

Multiple Choice

Suppose a tax of $0.10 per unit on a good creates a deadweight loss of $100.If the tax is increased to $0.25 per unit,the deadweight loss from the new tax would be

• A)$200.
• B)$250.
• C)$475.
• D)$625.

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Definitions:

Rate of Return

The enhancement or diminution in an investment’s value over a fixed span, presented as a percentage of the investment’s original price.

Rate of Return

The upward or downward movement in the value of an investment across a predefined period, depicted as a percentage of the initial investment cost.

Equipment

Tangible physical assets used in the operation of a business, such as machinery, computer hardware, and vehicles, that have a longer life expectancy and are not intended for resale.

Cash Flows

The complete financial movement into and out of a trade, greatly influencing its operational liquidity.