Use the Following to Answer Questions

question 211

Multiple Choice

Use the following to answer questions:
Figure: The Gasoline Market
-(Figure: The Gasoline Market) Look at the figure The Gasoline Market. The pretax equilibrium price is $3, and the equilibrium quantity before tax is 20,000 gallons. An excise tax has been levied on each gallon of gasoline, shifting the supply curve upward. The deadweight loss from this tax is equal to:

• A) $1.50.
• B) $5,000.
• C) $15,000.
• D) $4,375.

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Definitions:

Common Good

The benefit or interests of all involved in a given community or society, often cited as a reason for ethical or political actions.

Private Good

A product or service that is consumed by an individual or a limited group, characterized by its excludability and rivalrous nature.

Common Characteristics

Shared features or qualities among items, individuals, or groups that allow them to be categorized or identified as part of a larger set.

Nonprofit Organizations

Organizations that utilize surplus revenues to achieve their goals rather than distributing them as profit or dividends.