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:

Directionality

The quality or condition of having a specific direction, orientation, or tendency.

Activation

Involves the arousal of the brain or body to a state of increased responsiveness to stimuli.

Vigor

Physical strength, health, and energy.

Nomothetic

An approach in psychology that seeks to study and identify general laws and principles that can be applied broadly across individuals.