Suppose Luke values a scoop of Italian gelato at $4. Leia values a scoop of Italian gelato at $6. The pre-tax price of a scoop of Italian gelato is $2. The government imposes a "fat tax" of $3 on each scoop of Italian gelato, and the price rises to $5. The deadweight loss from the tax is
a. $4, and the deadweight loss comes only from Luke because he does not buy gelato after the tax.
b. $2, and the deadweight loss comes from both Luke and Leia.
c. $4, and the deadweight loss comes from both Luke and Leia.
d. $2, and the deadweight loss comes only from Luke because he does not buy gelato after the tax.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose Luke values a scoop of Italian gelato at $4. Leia values a scoop of Italian gelato at $6. The pre-tax price of a scoop of Italian ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
In the prisoners' dilemma game, self-interest leads a. each prisoner to confess. b. to a breakdown of any agreement that the prisoners might have made before being questioned. c. to an outcome that is not particularly good for either prisoner. d.
Answers (1)
Water World sells wake boards and water skis and pays sales commissions based on product sales price. The wake boards sell for a higher price than the skis and the skis have a higher contribution margin per unit than the wake boards.
Answers (1)
Charged off as bad debt canceled by credit grantor. True or False
Answers (1)
Which of the following statements indicate a disadvantage of using the discounted payback period for capital budgeting decisions? Choose all that apply. A. The discounted payback period does not take the project's entire life into account. B.
Answers (2)
How does a consumers right to be heard affect the producers of the goods they buy? List some examples.
Answers (1)
New Questions in Business
Shares of RossCorp stock are selling for $45 per share. Brokerage commissions are 2% for purchases and 2% for sales. The interest rate on margin debt is 6.25% per year. The maintenance margin is 30
Answers (1)
For each of the goods, identify the characteristics that describe each good. Note that each good will be described with two characteristics. Rivalrous is also referred to as rival in consumption.
Answers (1)
What is production technology and how does it differ from a production function? A. It is a function showing the highest output that a firm can produce for every specified combination of inputs, while the production function shows the minimum output
Answers (1)
The lowest school dropout rate in the united states in 2008 occurred for:
Answers (1)
One reason buy a home instead of rent a home is
Answers (1)