Other things equal, the deadweight loss of a tax
a. decreases as the size of the tax increases.
b. increases as the size of the tax increases, but the increase in the deadweight loss is less rapid than the increase in the size of the tax.
c. increases as the size of the tax increases, and the increase in the deadweight loss is more rapid than the increase in the size of the tax.
d. increases as the price elasticities of demand and/or supply increase, but the deadweight loss does not change as the size of the tax increases.
c
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Explain how the following factors will shift the supply curve for sparkling wine:
a. New irrigation technology improves the average yield of a vineyard. b. Following an increase in the immigration of unskilled labor, the wages of wine-grape pickers fall. c. The government sets a minimum wage for seasonal employment.
A principal disadvantage of conventional checking accounts compared to money market mutual funds is that checking accounts
a. are less liquid. b. often do not pay interest. c. cannot be used as a store of value. d. are not insured by deposit insurance.