Scenario 12-2 Suppose That Bob Places a Value of $10 on a on a Movie

question 535

Multiple Choice

Scenario 12-2
Suppose that Bob places a value of $10 on a movie ticket and that Lisa places a value of $7 on a movie ticket. In addition, suppose the price of a movie ticket is $5.
-Refer to Scenario 12-2. Suppose the government levies a tax of $1 on each movie ticket and that, as a result, the price of a movie ticket increases to $6.00. If Bob and Lisa both purchase a movie ticket, what is total consumer surplus for Bob and Lisa?

• A)$0.00
• B)$0.50
• C)$5.00
• D)$6.00

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Definitions:

Misleading Claims

Statements or representations that are false or deceptive, usually made to entice customers or influence stakeholders.

FTC

refers to the Federal Trade Commission, a U.S. federal agency tasked with protecting consumers and ensuring a strong competitive market by enforcing antitrust and consumer protection laws.

Federal Trade Commission Act

A United States federal law established in 1914 to prevent unfair competition, deceptive advertising, and monopolies, empowering the Federal Trade Commission to regulate and enforce provisions against these practices.

Truth in Lending Act

A U.S. federal law designed to protect consumers in their dealings with lenders and creditors, by requiring clear disclosure of loan terms and costs.