Reference: Ref 10-7 (Figure: Softella) the Figure Shows a Market

question 57

Multiple Choice

Reference: Ref 10-7 (Figure: Softella) The figure shows a market for medicated tissues. Assume that the only use for these tissues is to wipe and clean one's hands thus preventing germs from spreading to other people. If the government were to subsidize the users of these tissues, what is the dollar amount of deadweight loss that would be removed from this market?

• A) $1,600
• B) $2,800
• C) $5,600
• D) $800

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Definitions:

Reality

The state of things as they actually exist, outside of individual perceptions or interpretations.

Ego

The largely conscious, “executive” part of personality that, according to Freud, mediates among the demands of the id, the superego, and reality. The ego operates on the reality principle, satisfying the id’s desires in ways that will realistically bring pleasure rather than pain.

Oedipus Complex

According to Freud, a boy’s sexual desires toward his mother and feelings of jealousy and hatred for the rival father.

Pleasure Principle

A concept in psychoanalytic theory referring to the instinctual seeking of pleasure and avoiding of pain to satisfy biological and psychological needs.