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Aiden gives piano lessons. He has an opportunity cost of $50 per lesson and charges $60. He has two students: Brandon, who has a willingness to pay of $/0, and Chloe, who has a willingness to pay of $90. When the government puts a $20 tax on piano lessons and Aiden raises his price to $80, the deadweight loss is ______ and the tax revenue is _______. a. $10, $20 b. $10, $40 c. $20, $20 d. $20, $40

BuyFind

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050
BuyFind

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050

Solutions

Chapter
Section
Chapter 12.2, Problem 2QQ
Textbook Problem

Aiden gives piano lessons. He has an opportunity cost of $50 per lesson and charges $60. He has two students: Brandon, who has a willingness to pay of $/0, and Chloe, who has a willingness to pay of $90. When the government puts a $20 tax on piano lessons and Aiden raises his price to $80, the deadweight loss is ______ and the tax revenue is _______.

a. $10, $20

b. $10, $40

c. $20, $20

d. $20, $40

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