Explain how a government can use a tax on dry cleaning to bring about the efficient level of production. OA. The government can use a tax to decrease the marginal private benefit of consuming dry cleaning to equal the marginal social benefit. OB. The government can use a tax to decrease the marginal social cost of producing dry cleaning to equal the marginal private cost. OC. The government can use a tax to increase the marginal private cost of producing dry cleaning to equal the marginal social cost OD. The government can use a tax to increase the marginal private benefit of consuming dry cleaning to equal the marginal social benefit. OE. The government can use a tax to decrease the marginal private cost of producing dry cleaning to equal the marginal social cost What should the value of the tax be? The tax should be $ per unit (Enter your response rounded to two decimal places.) How large is the deadweight loss (in dollars) from excessive dry cleaning, according to the figure? The deadweight loss is thousand (Enter your response as an integer) CELE 8.00- 5.00- 4,00 2,00- 0,00 8.00- 5.00- 4.00- 2.00 S-marginal social cost marginal private cost D 0.00 0 200 400 600 800 1000 1200 1400 1600 1800. Quantity (items cleaned per week in 1000s)
Explain how a government can use a tax on dry cleaning to bring about the efficient level of production. OA. The government can use a tax to decrease the marginal private benefit of consuming dry cleaning to equal the marginal social benefit. OB. The government can use a tax to decrease the marginal social cost of producing dry cleaning to equal the marginal private cost. OC. The government can use a tax to increase the marginal private cost of producing dry cleaning to equal the marginal social cost OD. The government can use a tax to increase the marginal private benefit of consuming dry cleaning to equal the marginal social benefit. OE. The government can use a tax to decrease the marginal private cost of producing dry cleaning to equal the marginal social cost What should the value of the tax be? The tax should be $ per unit (Enter your response rounded to two decimal places.) How large is the deadweight loss (in dollars) from excessive dry cleaning, according to the figure? The deadweight loss is thousand (Enter your response as an integer) CELE 8.00- 5.00- 4,00 2,00- 0,00 8.00- 5.00- 4.00- 2.00 S-marginal social cost marginal private cost D 0.00 0 200 400 600 800 1000 1200 1400 1600 1800. Quantity (items cleaned per week in 1000s)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Explain how a government can use a tax on dry
cleaning to bring about the efficient level of production.
OA. The government can use a tax to decrease the
marginal private benefit of consuming dry
cleaning to equal the marginal social benefit.
OB. The government can use a tax to decrease the
marginal social cost of producing dry cleaning
to equal the marginal private cost.
OC. The government can use a tax to increase the
marginal private cost of producing dry cleaning
to equal the marginal social cost
OD. The government can use a tax to increase the
marginal private benefit of consuming dry
cleaning to equal the marginal social benefit.
OE. The government can use a tax to decrease the
marginal private cost of producing dry cleaning
to equal the marginal social cost
What should the value of the tax be? The tax should
be $ per unit (Enter your response rounded to two
decimal places)
How large is the deadweight loss (in dollars) from
excessive dry cleaning, according to the figure? The
deadweight loss is thousand (Enter your
response as an integer)
CELE
8.00-
5.00
4,00
2.00-
0,00
8.00-
5.00-
4.00
2.00
S-marginal social cost
marginal private cost
D
0.00
0 200 400 600 800 1000 1200 1400 1600 1800
Quantity (items cleaned per week in 1000s)
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