Leonard, Sheldon, Raj, and Penny Each Like Science Fiction Moves

question 452

Multiple Choice

Leonard, Sheldon, Raj, and Penny each like science fiction moves. The price of a special boxed set of Star Trek DVDs is $50. Leonard values the set of movies at $70, Sheldon at $65, Raj at $60, and Penny at $55. Suppose that if the government taxes DVDs at $10 each, the price rises to $60. A consequence of the tax is that consumer surplus shrinks by

• A)$50 and tax revenues increase by $30, so there is a deadweight loss of $20.
• B)$35 and tax revenues increase by $30, so there is a deadweight loss of $5.
• C)$20 and tax revenues increase by $20, so there is no deadweight loss.
• D)$15 and tax revenues increase by $20, so there is no deadweight loss.

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Definitions:

Continuous Improvement

An ongoing effort to improve products, services, or processes by making incremental improvements over time, or sudden improvements all at once.

Cost Savings

Represents the actions that reduce expenses or costs within an organization in order to improve profitability without compromising the quality of products or services.

Cost Overrides

Expenses that exceed the original budget allocations for projects or initiatives.

Vendor Package

A set of goods or services offered by a vendor, often as a bundled solution to meet specific business needs.