Suppose a Tax of $5 Per Unit Is Imposed on a Good

question 137

Multiple Choice

Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300. The deadweight loss from the tax is

• A)$250.
• B)$500.
• C)$750.
• D)$1,000.

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Definitions:

Lazy

A term used to describe a lack of willingness or motivation to work or engage in activity.

Political Condition

The state of internal and external affairs of a government or nation, often referencing levels of stability, governance quality, and current political issues.

Free Black Men

African American males who were not enslaved and lived in the United States before the abolition of slavery in 1865.

Civil War

A conflict from 1861 to 1865 in the United States between the Northern states (Union) and the Southern states (Confederacy) primarily over the issues of slavery and states’ rights.