Explain the problem of deadweight loss associated with giving at Christmas? According to Joel Waldfogel how much value is “destroyed” as a result of Christmas gift giving? How did the Planet Money staff measure the “wealth” in the classroom after the candy was distributed? What was the total level of “wealth” before the children were allowed to exchange? What was the level after?

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter2: Some Tools Of The Economist
Section: Chapter Questions
Problem 15CQ
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  1. Explain the problem of deadweight loss associated with giving at Christmas?
  2. According to Joel Waldfogel how much value is “destroyed” as a result of Christmas gift giving?
  3. How did the Planet Money staff measure the “wealth” in the classroom after the candy was distributed?
  4. What was the total level of “wealth” before the children were allowed to exchange? What was the level after? 
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Deadweight loss - It is loss incurred by society due to market inefficiency. These inefficiency can be due to market structure , population behaviour or even due to government policies.

Example - Deadweight loss due taxes , deadweight loss due to externalities 

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