Due Friday, Jan. 18
1. (2 pts) Explain the meaning of the terms
"excess burden" and "deadweight loss."
2. (2 pts) Why does a tax cause an excess burden?
3. (3 pts) What is the economic significance or consequence of the excess burden?
4. (3 pts) Is there a morally acceptable source of government revenue that does not have an excess burden?
Explain why or why not, involving both supply and demand.