Suppose a Tax of $4 Per Unit Is Imposed on a Good,and

question 103

Multiple Choice

Suppose a tax of $4 per unit is imposed on a good,and the tax causes the equilibrium quantity of the good to decrease from 2,000 units to 1,700 units.The tax decreases consumer surplus by $3,000 and decreases producer surplus by $4,400.The deadweight loss of the tax is

• A)$200.
• B)$400.
• C)$600.
• D)$1,200.

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Definitions:

Western Hemisphere

The half of the Earth that lies west of the Prime Meridian (which crosses Greenwich, London, England) to the International Date Line, comprising the Americas and their surrounding waters.

Freeholders

Historically, individuals who owned their land outright, without owing feudal duties or rents to a superior, often having specific political rights or privileges in their locality.

Suffrage

The entitlement to participate in political elections by casting a vote.