Figure 8-8 Suppose the Government Imposes a $10 Per Unit Tax on Tax

question 16

Multiple Choice

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good.
-Refer to Figure 8-8.One effect of the tax is to

• A)reduce consumer surplus from $180 to $72.
• B)reduce producer surplus from $96 to $24.
• C)create a deadweight loss of $72.
• D)All of the above are correct.

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Definitions:

Summary Plan Description

A document provided by plan administrators that clearly explains the benefits, rights, and obligations under a retirement or health plan.

Employee Retirement Income Security Act

A federal law that sets minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans.

Benefit Plan

A set of benefits provided by an employer to its employees, which may include health insurance, retirement savings plans, and other perks.

Consolidated Omnibus Budget Reconciliation Act

A U.S. federal law that provides individuals and their families the option to continue healthcare coverage for a limited time after losing health benefits.