Suppose Rebecca needs a dog sitter so that she can travel to her sister's wedding. Rebecca values dog sitting for the weekend at $200 . Susan is willing to dog sit for Rebecca so long as she receives at least $150 . Rebecca and Susan agree on a price of $175 . Suppose the government imposes a tax of $10 on dog sitting. The tax has made Rebecca and Susan worse off by a total of
a. $50.
b. $40.
c. $20.
d. $10.
d
You might also like to view...
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in taxes on luxury yachts B) an investment tax credit C) a reduction in sales taxes D) all of the above
If the price elasticity of demand is less than 1, then consumer demand is
A) unrelated to the elasticity of demand. B) inelastic. C) elastic. D) unitary elastic.
Which of the following correctly describes real GDP?
a. Real GDP is GDP after subtracting spending on frivolous items like candy, movies, and toys. b. Real GDP is GDP after subtracting false growth induced by imported goods. c. Real GDP is GDP after adding export sales to foreign countries. d. Real GDP is GDP after subtracting out the effects of inflation.
Which of the following statements is true?
A) Price ceilings set below the equilibrium price cause shortages. B) Surpluses result when a price floor is set above the equilibrium price. C) Price ceililngs set above the equilibrium price cause surpluses. D) Price ceilings are set by the market and price floors are set by the government. E) ?a and b