Suppose a Tax of $0

question 45

Multiple Choice

Suppose a tax of $0.50 per unit on a good creates a deadweight loss of $100.If the tax is increased to $2.50 per unit,the deadweight loss from the new tax would be

• A)$200.
• B)$250.
• C)$500.
• D)$2,500.

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Definitions:

Assignment

The act of moving ownership or entitlements from one individual or entity to another.

Personal Nature

relates to characteristics or matters that are primarily concerning or affecting an individual rather than a broader group or organizational level.

Expressly Agree

To explicitly consent to or acknowledge something, typically in a clear and unequivocal manner.

Validly Assigned

Legally transferred or delegated to another party, in the context of rights, duties, or properties, in accordance with applicable laws and agreements.