-Refer to Figure 16-2

question 10

Multiple Choice

-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:

Torts against Economic Interest

Legal wrongs committed that cause financial harm or damage to a person’s economic position.

Strict-liability

A legal doctrine in tort law that holds a party responsible for their actions or products, without the need to prove negligence or fault.

Inherently Dangerous

Activities or items possessing potential for significant harm due to their nature.

Unreasonable Risk

A level of danger that exceeds what is considered acceptable or appropriate under given circumstances.