Refer to Figure 1.1. The Stamp Act of 1765 imposed an excise tax of P1 minus P3. Compared with no tax, consumer surplus decreased by
a.) area "f"
b.) area "b+c"
c.) area "e+f"
d.) None of the above.
Answer: b
Refer to Figure 1.1. The Stamp Act of 1765 imposed an excise tax of P1 minus P3. Compared with no tax, consumer surplus decreased by
a.) area "f"
b.) area "b+c"
c.) area "e+f"
d.) None of the above.
Answer: b