Author Question: Refer to Figure 18-2. If the government imposes an excise tax of 1.00 on every unit sold, what is ... (Read 38 times)

HudsonKB16 · **on:** Jun 29, 2018

Refer to Figure 18-2. If the government imposes an excise tax of 1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

A) the area adc if the supply curve is S0 and the area bec if the supply curve is S1.
B) the area becf under either supply curve.
C) the area afcd if the supply curve is S0 and the area bfce if the supply curve is S1.
D) There is no deadweight loss; revenue raised is used to fund government projects.

Question 2

When the price of a financial asset ________ its interest rate will ________.

A) rises; remain the same B) falls; rise
C) falls; fall D) rises; rise