Which of the following is NOT true about the $3 per pizza tax illustrated in the above figure?
A) It decreases consumer surplus by $90 thousand.
B) It decreases producer surplus by $45 thousand.
C) It creates a deadweight loss of $135 thousand.
D) None of the above because they are all true.
C
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Assume that a doctor makes $200 per hour, a lawyer $250 per hour, an architect $140 per hour, a professor $50 per hour, and a waiter $35 per hour. Which of these professionals is most likely to spend time to negotiate with a car dealer?
a. The doctor b. The lawyer c. The architect d. The professor e. The waiter
To reach the socially optimal allocation of resources, the amount of government revenue received from a pollution tax should be
a. equal to the negative externality cost associated with producing the good b. less than the negative externality cost of producing the good c. greater than the negative externality cost of producing the good d. equal to the private cost of producing the good e. greater than the private cost of producing the good