Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 8 - Part III - Application: The Costs of Taxation - Quick Check Multiple Choice - Page 169: 3

Answer

c. increases by more than 50 percent.

Work Step by Step

The deadweight loss of a tax rises more rapidly than the size of the tax, the square of it to be exact. If the tax is increased by 50% (1.5x), the deadweight loss is increased by 2.25x (125%)
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