6. Suppose Rachel values having her house painted at $1,000. The cost for Paul to paint her...

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6. Suppose Rachel values having her house painted at $1,000. The cost for Paul to paint her house is $700. What is the value of the total surplus or the gains from trade on this transaction? What is the size of the tax that would eliminate this trade? What is the deadweight loss from this tax? What generalization can you make from this exercise?

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