3. Which of the following create deadweight loss? Which do not and are simply a transfer of...
Question:
3. Which of the following create deadweight loss? Which do not and are simply a transfer of surplus from one person to another? Explain your answer.
a. You have been evicted from your rent - controlled apartment after the landlord discovered your pet boa constrictor. The apartment is quickly rented to someone else at the same price. You and the new renter do not necessarily have the same willingness to pay for the apartment.
b. In a contest, you won a ticket to a jazz concert. But you can’t go to the concert because of an exam, and the terms of the contest do not allow you to sell the ticket or give it to someone else. Would your answer to this question change if you could not sell the ticket but could give it to someone else?
c. Your school’s dean of students, who is a proponent of a low - fat diet, decrees that ice cream can no longer be served on campus.
d. Your ice cream cone falls on the ground and your dog eats it. (Take the liberty of counting your dog as a member of society, and that, if he could, your dog would be willing to pay the same amount for the ice cream cone as you.)
Step by Step Answer:
Essentials Of Economics
ISBN: 9781429218290
2nd Edition
Authors: Paul Krugman, Robin Wells, Kathryn Graddy