Asked by
yaumel delgado
on Nov 17, 2024
Verified
Taxes cause deadweight losses because they prevent buyers and sellers from realizing some of the gains from trade.
Deadweight Losses
Economic inefficiencies that occur when market equilibrium is not achieved or when resources are not allocated optimally.
Gains From Trade
The benefits that countries obtain from engaging in international trade, allowing them to consume and produce beyond their own capabilities.
- Gain insight into the principle of deadweight loss and the effect taxes have on it.
Verified Answer
MR
Learning Objectives
- Gain insight into the principle of deadweight loss and the effect taxes have on it.
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