Reference: Ref 10-6 (Figure: ABC Company) the Figure Depicts the Market

question 5

Multiple Choice

Reference: Ref 10-6 (Figure: ABC Company) The figure depicts the market for a water cleaner for home aquariums. After use it gets washed down drains and enters into streams where it improves the mineral content of the water and thus leads to better water quality and better fish growth. If the users of the cleaner were given a subsidy to compensate them for the benefit they are creating for the ecological system, how much deadweight loss is removed from this market?

• A) $2,400
• B) $3,000
• C) $3,600
• D) $1,200

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Definitions:

Sternberg

Robert Sternberg, an American psychologist known for his work on intelligence, creativity, and love theories.

Cohabitate

To live together in a domestic setting without being married, often referring to couples.

Marriages

The legally or formally recognized union of two people as partners in a personal relationship.

Satisfaction

The feeling of pleasure or fulfillment that comes from achieving a goal, need, or expectation.