Elvis loves steak. Suppose he values the first steak sandwich he eats at $5, the second at $4.50, and the third at $4 . If he buys the 3-for-$4 special, his consumer surplus is
a. $5
b. $4
c. $1.50
d. $9.50
e. $12
C
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Suppose that a tariff is imposed on imports of minivans. Show graphically what the effect is in terms of price and quantity of imports. Be sure that your graph is completely and correctly labeled. What determines how much of the tariff is paid by the buyers of the minivans?
What will be an ideal response?
Disposable income is not:
A. total income minus taxes. B. what consumers base their buying decisions on. C. the amount consumers have to spend on goods and services. D. income before tax.
When disposable income is 6,000 savings is
A. -2100.
B. 0.
C. 2100.
D. 3900.
Explain what is meant by "internalizing an externality," and describe three methods by which this can be done.
What will be an ideal response?