Leonard, Sheldon, Raj, and Penny Each Like to Attend Comic-Book

question 76

Multiple Choice

Leonard, Sheldon, Raj, and Penny each like to attend comic-book conventions. The price of a ticket to a convention is $50. Leonard values a ticket at $70, Sheldon at $65, Raj at $60, and Penny at $55. Suppose that if the government taxes tickets at $5 each, the price will rise to $55. A consequence of the tax is that consumer surplus shrinks by

• A)$50 and tax revenues increase by $20, so there is a deadweight loss of $30.
• B)$30 and tax revenues increase by $20, so there is a deadweight loss of $10.
• C)$20 and tax revenues increase by $20, so there is no deadweight loss.
• D)$50 and tax revenues increase by $20, so there is no deadweight loss.

Grasp the concept of cost-effectiveness in control mechanisms.

Understand the necessity of flexibility in organizational controls.

Comprehend the importance of balancing cost versus benefit in effective control systems.

Recognize the various attributes that make controls effective.