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    Principles of Microeconomics
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    Exam 8: Application: the Costs of Taxation
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    Why Does a Tax Have a Deadweight Loss
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Why Does a Tax Have a Deadweight Loss

Question 71

Question 71

Multiple Choice

Why does a tax have a deadweight loss


A) because it induces the government to run a deficit
B) because it induces buyers to consume less and sellers to produce less
C) because it causes a disequilibrium in the market
D) because the loss to buyers is greater than the loss to sellers

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