Figure 162 Figure 16

Multiple Choice

Figure 16.2 Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

A) The area adc if the supply curve is S₀ and the area bec if the supply curve is S₁
B) The area afcd if the supply curve is S₀ and the area bfce if the supply curve is S₁
C) The area becf under either supply curve
D) There is no deadweight loss; revenue raised is used to fund government projects.