Figure 162 Figure 16

question 9

Multiple Choice

Figure 16.2 Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

• A)The area adc if the supply curve is S₀ and the area bec if the supply curve is S₁
• B)The area afcd if the supply curve is S₀ and the area bfce if the supply curve is S₁
• C)The area becf under either supply curve
• D)There is no deadweight loss; revenue raised is used to fund government projects.

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Definitions:

Carbon Monoxide

A colorless, odorless, and tasteless gas that is highly toxic, produced by the incomplete combustion of carbon-containing materials.

Geometry

The branch of mathematics concerned with the properties and relations of points, lines, surfaces, solids, and higher-dimensional analogs.

Linear

Describing a structure, progression, or relationship that follows a straight line or in simpler terms, one that proceeds from one stage to the next in a single series of steps.

Ammonia Molecule

A compound made of nitrogen and hydrogen with the formula NH3, characterized by a sharp smell and often used in fertilizers.