Suppose That the Market for Large,64-Ounce Soft Drinks in the Town

question 24

Multiple Choice

Suppose that the market for large,64-ounce soft drinks in the town of Pudgyville is characterized by a typical,downward-sloping,linear demand curve and a typical,upward-sloping,linear supply curve.The market is initially in equilibrium with 1,000 soft drinks sold per day.The newly-elected Mayor of Pudgyville wants to tax 64-ounce soft drinks.She is considering either a $0.10 tax or a $0.30 tax.Her chief economic advisor estimates that the number of soft drinks sold after a $0.10 tax will be 900 and after a $0.30 tax will be 500.Which tax is better?

• A)The $0.10 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.30 tax.
• B)The $0.30 tax is better because it raises more revenue and creates a lower deadweight loss than the $0.10 tax.
• C)It is not clear which tax is better because although the $0.30 tax raises more tax revenues,it creates a larger deadweight loss than the $0.10 tax.
• D)It is not clear which tax is better because although the $0.10 tax raises more tax revenues,it creates a larger deadweight loss than the $0.30 tax.

Explore the social trends influencing changes in relationship formations and dissolutions.

Assess the psychological and emotional outcomes for children of divorced or remarried parents.

Recognize the significance of economic factors in marriage and divorce.

Evaluate the role of individual adjustment and coping resources in post-divorce recovery.

---

Definitions:

Dissociative Reference Group

A group that an individual does not want to associate with, and therefore takes steps to distance themselves from in their purchasing decisions or behaviors.

Family Life Cycle

A series of stages through which a family progresses over time, influencing buying behaviors and marketing strategies.

Consumption Subculture

A distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity.

Shared Commitment

A mutual agreement or pledge among members of a group to pursue a common goal or adhere to a particular set of standards or principles.