Figure 8-7
The vertical distance between points A and B represents a tax in the market.

-Refer to Figure 8-7.The deadweight loss associated with this tax amounts to
A) $60, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses.
B) $60, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.
C) $40, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses.
D) $40, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.

Question

Figure 8-7
The vertical distance between points A and B represents a tax in the market.
 
-Refer to Figure 8-7.The deadweight loss associated with this tax amounts to
A) $60, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. 
B) $60, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers. 
C) $40, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. 
D) $40, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.

Quizplus · Accepted Answer

The Answer of Figure 8-7
The vertical distance between points A and B represents a tax in the market.
 
-Refer to Figure 8-7.The deadweight loss associated with this tax amounts to
A) $60, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. 
B) $60, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers. 
C) $40, and this figure represents the amount by which tax revenue to the government exceeds the combined loss of producer and consumer surpluses. 
D) $40, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.

Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents