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Questions › JNU › JNU SSS 2019 › Q24
1 markPublic Economics › Taxation: incidence and efficiency › Excess burden and deadweight loss of taxationHardabout 2 min

JNU SSS 2019 Question 24: Taxation: incidence and efficiency

In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. The price paid by buyers increases by $2 and the after-tax price received by sellers falls by $3. The government can raise $750 per month in revenue from the tax. The deadweight loss from the tax is:

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Taxation: incidence and efficiency has come up 79 times in 7 exams since 2009.

What this question tests

This question is on Excess burden and deadweight loss of taxation, part of Taxation: incidence and efficiency in Public Economics.

The efficiency cost of a tax beyond the revenue it raises.

TestStop has 9 past-paper questions on this subtopic.

Practise Taxation: incidence and efficiencyMore on Excess burden and deadweight loss of taxation

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