Figure 18-2 Figure 18-2 Shows a Demand Curve and Two

question 235

Multiple Choice

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

• A) is P_a - P_c under either supply curve.
• B) is P_b - P_c under either supply curve.
• C) is P_a - P_c if the supply curve is S₀ and P_b - P_c if the supply curve is S₁.
• D) is P_a - P_d if the supply curve is S₀ and P_b - P_e if the supply curve is S₁.

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Definitions:

Labor Rate Variance

The variance between the real hourly wage workers receive and the anticipated or usual wage rate, when multiplied by the total hours of work.

Labor Efficiency Variance

The variance between the real hours spent working and the anticipated standard hours, times the normal wage rate.

Standard Hours

The predetermined amount of time expected to complete a task or produce a unit of product under normal conditions.

Actual Output

The real quantity of goods or services produced by a company during a specific period.