Use the Following to Answer Questions

question 135

Multiple Choice

Use the following to answer questions:
Scenario: The Market for Good X:
The market for good X can be depicted with the following demand and supply equations:
Demand: P = 50 - 0.5Q
Supply: P = 0.33Q
where P is price per unit and Q represents quantity in units. Policy makers plan on imposing a $1 per unit tax on this good.
-(Scenario: The Market for Good X) Look at the scenario The Market for Good X. If a $1 per unit tax is imposed, the price of good X will increase by:

• A) $20.00.
• B) $0.60.
• C) $1.00.
• D) $1.50.

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Definitions:

Multiplicative Inverse

Also known as the reciprocal, it is a number which, when multiplied by the original number, results in a product of one.

Distributive Property

A property that allows one to multiply a single term by each term within a parenthesis in a sum or difference.

Real Numbers

The set of all rational and irrational numbers, including all numbers that can be written as a decimal.

Associative Property

A mathematical principle stating that the way in which terms are grouped in an operation (addition or multiplication) does not change the result.