Figure 8-19 the Vertical Distance Between Points a and B Represents the Represents

question 38

Multiple Choice

Figure 8-19
The vertical distance between points A and B represents the original tax.
-Refer to Figure 8-19.If the government changed the per-unit tax from $5.00 to $7.50,then the price paid by buyers would be $10.50,the price received by sellers would be $3,and the quantity sold in the market would be 0.5 units.Compared to the original tax rate,this higher tax rate would

• A)increase government revenue and increase the deadweight loss from the tax.
• B)increase government revenue and decrease the deadweight loss from the tax.
• C)decrease government revenue and increase the deadweight loss from the tax.
• D)decrease government revenue and decrease the deadweight loss from the tax.

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