Suppose a Tax Is Imposed on Each New Hearing Aid

question 194

Multiple Choice

Suppose a tax is imposed on each new hearing aid that is sold. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. As a result of the tax, the equilibrium quantity of hearing aids decreases from 10,000 to 9,000, and the deadweight loss of the tax is $60,000. We can conclude that the tax on each hearing aid is

• A)$60.
• B)$120.
• C)$160.
• D)$200.

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Definitions:

Opportunity To Change

The possibility or potential for modification, transformation or transitioning from one state or condition to another.

Motivation

The internal drive or external incentive that stimulates an individual to act towards achieving a goal.

Capability

The ability or qualities necessary to do something effectively.

Opportunity

A set of circumstances that makes it possible to do something or achieve a specific outcome.