If the Demand Curve and the Supply Curve for a Good

question 36

Multiple Choice

If the demand curve and the supply curve for a good are straight lines,then the deadweight loss that results from a tariff is represented on the supply-and-demand graph by

• A)the area of one triangle.
• B)the area of one rectangle.
• C)the combined areas of two different triangles.
• D)the combined areas of two different rectangles.

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Definitions:

Annuity

An economic offering that guarantees regular payouts to an individual, typically used to supplement the income of those who are retired.

Payments Cease

Refers to the termination or halt of scheduled payments, often in the context of loans or financial instruments.

Pure Discount Loan

A loan where the borrower receives a single lump sum amount upfront and repays the lender a higher amount at the loan's maturity.

Lump Sum

A single payment of money, as opposed to a series of payments made over time.