If the government decides to impose a $700 tax on U.S.citizens vacationing abroad,then the deadweight loss from this tax will be:

A) relatively small.
B) relatively large.
C) zero.
D) absorbed by foreign governments.

Question

shivam arora · Accepted Answer

Final Answer : B, Explanation :  A $700 tax on U.S citizens vacationing abroad would likely result in a relatively large deadweight loss. This is because it would increase the cost of travel and reduce the amount of travel undertaken by U.S. citizens. This would lead to a reduction in consumer surplus, producer surplus, and total welfare, resulting in a significant deadweight loss.

If the government decides to impose a $700 tax on U.S.citizens vacationing abroad,then the deadweight loss from this tax will be:

A) relatively small.
B) relatively large.
C) zero.
D) absorbed by foreign governments.

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If the government decides to impose a $700 tax on U.S.citizens vacationing abroad,then the deadweight loss from this tax will be:A) relatively small.B) relatively large.C) zero.D) absorbed by foreign governments.

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Related questions

If the government decides to impose a $700 tax on U.S.citizens vacationing abroad,then the deadweight loss from this tax will be:

A) relatively small.
B) relatively large.
C) zero.
D) absorbed by foreign governments.