Table 12-3

-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.Suppose the government imposes a tax of $15 on skiing,which raises the price of a weekend ski pass to $53.The deadweight loss associated with the tax is
A) $2.
B) $37.
C) $52.
D) $97.

Question

Table 12-3
 
-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.Suppose the government imposes a tax of $15 on skiing,which raises the price of a weekend ski pass to $53.The deadweight loss associated with the tax is
A) $2. 
B) $37. 
C) $52. 
D) $97.

Quizplus · Accepted Answer

The deadweight loss is calculated as the loss in consumer and producer surplus due to the tax, which is the area of the triangle formed between the original price, the new price, and the quantity reduction. Here, it is $2.

Table 12-3 -Refer to Table 12-3.Assume That the Price of a Weekend