Figure 8-22 -Refer to Figure 8-22.Suppose the Government Initially Imposes a $3

question 41

Multiple Choice

Figure 8-22
-Refer to Figure 8-22.Suppose the government initially imposes a $3 per-unit tax on this good.Now suppose the government is deciding whether to lower the tax to $1.50 or raise it to $4.50.Which of the following statements is correct?

• A)Compared to the original tax,the smaller tax will decrease both tax revenue and deadweight loss.
• B)Compared to the original tax,the larger tax will increase both tax revenue and deadweight loss.
• C)Compared to the original tax,the larger tax will decrease tax revenue and increase deadweight loss.
• D)Both a and b are correct.

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Definitions:

Pulmonary Edema

A condition characterized by excess fluid in the lungs, leading to difficulty breathing.

Obstructive Sleep Apnea

A sleep disorder characterized by repeated stopping and starting of breathing due to throat muscles intermittently relaxing and blocking the airway during sleep.

Retained Secretions

Secretions that are not adequately cleared from the body, often referring to mucus or fluid in the lungs.

Thorax

The part of the body between the neck and the abdomen, encased by the ribs and containing the heart and lungs.