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Figure 162 Figure 16

Question 73

Multiple Choice

Figure 16.2 Figure 16.2   Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold, A) the deadweight loss is identical under either supply curve. B) the deadweight loss is greater under the supply curve S<sub>1</sub>. C) the deadweight loss is greater under the supply curve S<sub>0</sub>. D) there is no deadweight loss since revenue raised is used to fund government projects. Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold,


A) the deadweight loss is identical under either supply curve.
B) the deadweight loss is greater under the supply curve S1.
C) the deadweight loss is greater under the supply curve S0.
D) there is no deadweight loss since revenue raised is used to fund government projects.

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