Table 12-2 -Refer to Table 12-2. Suppose That the Government Imposes a Government

question 267

Multiple Choice

Table 12-2
-Refer to Table 12-2. Suppose that the government imposes a $2 tax on delights, causing the price to increase from $4.00 to $6.00. Total consumer surplus will fall from

• A)$6 to $3.
• B)$7 to $4.
• C)$6 to $2.
• D)$5 to $3.

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Definitions:

Marginal Cost

The cost incurred from producing one additional unit of a product or service.

Output

The amount of goods or services produced by a business, industry, or economy.

Oligopolistic

Pertaining to an oligopoly, describing a market dominated by a small number of firms, leading to strategic behaviors among them.

Gas Stations

Facilities that sell fuel and engine lubricants for motor vehicles. Some may also offer convenience store goods and car wash services.