-The figure above shows a tax imposed on a good with an external cost.The area of the rectangle abcd equals
A) the MSB.
B) the total tax revenue collected by the government.
C) the amount of pollution tax per ton.
D) the MC.
E) the deadweight loss.

Question

-The figure above shows a tax imposed on a good with an external cost.The area of the rectangle abcd equals
A) the MSB. 
B) the total tax revenue collected by the government. 
C) the amount of pollution tax per ton. 
D) the MC. 
E) the deadweight loss.

Quizplus · Accepted Answer

The area of the rectangle abcd represents the total tax revenue collected by the government, as it is the product of the tax imposed per unit (height of the rectangle) and the quantity of the good sold (width of the rectangle).

-The Figure Above Shows a Tax Imposed on a Good