Figure 4-20
Refer to . The price that sellers receive after the tax is imposed is
a.
$8.
b.
$6.
c.
$5.
d.
$3.
c
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Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each
A) there will be a surplus of soft drinks. B) there will be a shortage of soft drinks. C) the supply curve of soft drinks will shift leftward. D) the demand curve for soft drinks will shift leftward.
Which of the following would not be included in government purchases?
a. The purchase of a computer by a government agency b. Welfare payments c. Wages of government employees d. The purchase of a police car e. Spending on a new missile program
Your neighbor in an apartment complex plays his music very loudly late at night, which makes it difficult for you to get to sleep. You offer the neighbor $50, the monetary value you put on your sleep, to never play his music between midnight and 7 AM. By
doing so A) you have failed to bring about an efficient solution since you should have complained to the police. B) you have indicated the cost of the externality. The externality is not internalized even if he accepts your offer. C) you have indicated the cost of the externality, which internalizes the externality. D) you have indicated a willingness to make the external cost a social cost.
According to its advocates, what are four advantages product differentiation and advertising provide to consumers?
What will be an ideal response?