Question

scmx | (-) Summary × | D Principles 5, Market Outcom... Il 16% 01/28/19 Suppose the government wants to minimize the deadweight loss associated with an excise tax. Sort the following goods into their correct category based on the size of the deadweight loss that will be created after the imposition of an excise tax. Items (5 items) (Drag and drop into the appropriate area below) Gasoline Phone service Cauliflower Fur coat Cigarêttes Categories Small DWL Large DWL VIEW SOLUTION 04/18 >

Answer 1

Higher the elasticity higher is the deadweight loss.

Demand for gasoline, phone service, cigarettes is inelastic.

Demand for cauliflower and fur coat is elastic.

Large DWL- cauliflower and fur coat

Small DWL- gasoline, phone service, cigarettes