Refer to Scenario 19

question 67

Multiple Choice

Refer to Scenario 19.3 below to answer the question(s) that follow.
SCENARIO 19.3: Suppose demand for widgets is given by the equation P = 20 - 0.5Q. Originally, the price of the good is $10 per unit. When a tax of $2 per unit is imposed, the price of the good rises to $12 per unit.
-Refer to Scenario 19.3. Prior to the imposition of the tax consumer surplus was ________ and after the tax was imposed consumer surplus was ________.

• A) $100; $64
• B) $64; $100
• C) $200; $128
• D) $50; $32

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Definitions:

Relative Frequency

The proportion of occurrences of a specific event compared to the overall amount of attempts or observations.

Nonoverlapping Classes

Categories or groups in a classification system where each member of the population belongs to one and only one group, ensuring distinct boundaries.

Cumulative Frequency

The sum of a series of frequencies, calculated by adding each frequency from a frequency distribution table to the sum of its predecessors.

Upper Limit

The maximum value in a given set or the highest value that a variable can assume.