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Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735 Exercise 10
Figure 1 shows the impact of a tax on airline tickets.
a. What is the annual deadweight loss of the tax in dollars? [Hint: Calculate the deadweight loss directly,viewing it as the area of a triangle turned on its side. Note that the area of a triangle is ½ × height × base.]
b. In the discussion of Figure 10 in the chapter,government revenue from the tax was calculated. Use this dollar figure,and your answer in (a)above,to calculate the deadweight loss per dollar of government revenue.
Figure 1 Deadweight Loss from an Excise Tax
![Figure 1 shows the impact of a tax on airline tickets. a. What is the annual deadweight loss of the tax in dollars? [Hint: Calculate the deadweight loss directly,viewing it as the area of a triangle turned on its side. Note that the area of a triangle is ½ × height × base.] b. In the discussion of Figure 10 in the chapter,government revenue from the tax was calculated. Use this dollar figure,and your answer in (a)above,to calculate the deadweight loss per dollar of government revenue. Figure 1 Deadweight Loss from an Excise Tax](https://storage.examlex.com/SM3044/11eb872f_ac7a_9722_a220_89cbcb440093_SM3044_00.jpg)
a. What is the annual deadweight loss of the tax in dollars? [Hint: Calculate the deadweight loss directly,viewing it as the area of a triangle turned on its side. Note that the area of a triangle is ½ × height × base.]
b. In the discussion of Figure 10 in the chapter,government revenue from the tax was calculated. Use this dollar figure,and your answer in (a)above,to calculate the deadweight loss per dollar of government revenue.
Figure 1 Deadweight Loss from an Excise Tax
Explanation
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Deadweight loss is the sum of production...
Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
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