When the size of a tax is doubled, the deadweight loss from the tax:
A)increases by the size of the tax
B)doubles
C)remains constant
D)increases by four times

Name: When the size of a tax is doubled, the deadweight loss from the tax: A)increases by the size of the tax B)doubles C)remains constant D)increases by four times
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Question

Quizplus · Accepted Answer

The deadweight loss from a tax increases with the square of the size of the tax. Therefore, if the size of the tax is doubled, the deadweight loss increases by four times.

When the Size of a Tax Is Doubled, the Deadweight