Suppose that the government imposes a tax on heating oil.Would the deadweight loss of this tax likely be greater in the first year after it is imposed or in the fifth year? Would the tax revenue collected from this tax likely be greater in the first year after it is imposed or in the fifth year? A.The deadweight loss and tax revenue would both be greater in the first year than the fifth. B.The deadweight loss would be greater in the first year than the fifth, but the tax revenue would be greater in the fifth year than the first. C.The deadweight loss would be greater in the fifth year than the first, but the tax revenue would be greater in the first year than the fifth. D.The deadweight loss and tax revenue would both be greater in the fifth year.

In economics, inefficient allocation of resources tends to create deadweight losses which reduce the…

Answered: Suppose that the government imposes a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the government imposes a tax on heating oil.

Would the deadweight loss of this tax likely be greater in the first year after it is imposed or in the fifth year? Would the tax revenue collected from this tax likely be greater in the first year after it is imposed or in the fifth year?

	A.	The deadweight loss and tax revenue would both be greater in the first year than the fifth.
	B.	The deadweight loss would be greater in the first year than the fifth, but the tax revenue would be greater in the fifth year than the first.
	C.	The deadweight loss would be greater in the fifth year than the first, but the tax revenue would be greater in the first year than the fifth.
	D.	The deadweight loss and tax revenue would both be greater in the fifth year.

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