Refer to the Graph Shown

question 127

Multiple Choice

Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $6 and a quantity of 40 units. If the government imposes a $2 per-unit tax on this product, consumer surplus will fall from:

• A)80 to 45.
• B)160 to 90.
• C)90 to 45.
• D)160 to 80.

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Definitions:

Montgomery Bus Boycott

A civil rights protest in 1955-1956 in Montgomery, Alabama, where African Americans refused to use the city buses to fight against segregated seating.

Rosa Parks

An African American civil rights activist whose refusal to give up her seat on a segregated bus in Montgomery, Alabama, in 1955 led to a citywide boycott and became a symbol of the fight against racial segregation.

Predatory Lending

Unethical practices by lenders who impose unfair and abusive loan terms on borrowers, often through high interest rates or unreasonable fees.

Loans

Money, property, or other material goods given to another party in exchange for future repayment of the loan value amount with interest or other finance charges.