Common property can lead to market failure

The new monetary policy tool that the Fed began using in 2008 is

A) changing the interest rate paid on reserves. B) imposing a surcharge on credit cards. C) putting a tax on all financial transactions. D) borrowing from China.

Refer to Sales Tax. Area C + D + F + G

The following questions refer to the accompanying diagram which shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.


a. the total value that consumers receive from their purchases.
b. the tax revenue collected by the government.
c. the fall in producers' surplus.
d. the deadweight loss due to the tax.