About 35,000 General Aviation Multiengine Airplanes Are Licensed to Operate

question 131

Multiple Choice

About 35,000 general aviation multiengine airplanes are licensed to operate in the United States. If an additional $1,000-per-year tax was levied on each plane to raise general revenue, economic thinking suggests the

• A) annual revenue from this tax would be less than $35,000,000.
• B) annual revenue from this tax would be $35,000,000.
• C) annual revenue from this tax would be more than $35,000,000.
• D) number of airplanes would increase dramatically.

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Definitions:

Technological Improvement

Advances and innovations in technology that enhance efficiency, productivity, or capabilities in various sectors.

Product Demand

The amount of a product or service that buyers are ready and capable of buying at different price levels over a specified time frame.

Decreasing-cost Industry

An industry wherein an increase in the scale of production leads to a reduction in the average cost of production.

Input Prices

The costs associated with purchasing the raw materials, labor, and other factors of production required to produce goods or services.