Figure 18-1

-Refer to Figure 18-1.The excess burden of the tax is represented by the area
A)B + C.
B)F + G.
C)E + H.
D)B + C + F + G.

Question

Figure 18-1
 
-Refer to Figure 18-1.The excess burden of the tax is represented by the area
A)B + C. 
B)F + G. 
C)E + H. 
D)B + C + F + G.

Quizplus · Accepted Answer

The excess burden of the tax is represented by the deadweight loss, which is equal to the areas E and H. Therefore, the correct choice is C, E + H. Choices A, B, and D include areas that represent tax revenue or consumer/producer surplus, which are not part of the deadweight loss.

Figure 18-1 -Refer to Figure 18-1.The Excess Burden of the Tax Is