Question

The Deadweight loss, is it decreasing or increasing by imposing domestic Tax and when imposing export Tax?

Answer 1

The deadweight loss can be defined as the fall in the total surplus due to market distortions and total surplus is the sum of consumer surplus and producer surplus.

Since the tax increases the price which the consumer pay and the price which the producer receive. Hence the tax either imposed domestically or imposing import tax create market distortion. So the deadweight loss will increase either by imposing domestic Tax and when imposing export Tax because both tax will decrease the total surplus. Hence the deadweight loss will increase.