-To Help Pay for the Cost of Sport Related Injuries

question 128

Multiple Choice

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, the area that equals the lost consumer surplus from this tax on sports equipment is

• A) bcd.
• B) P₁P₂cd.
• C) P₂P₃ec.
• D) ced.

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Definitions:

Opportunity Cost

Represents the value of the next best alternative forgone when a decision is made to choose one option over others.

Factors Of Production

Factors of production are the inputs needed for the creation of a good or service, including land, labor, capital, and entrepreneurship.

Unemployment Of Resources

Unemployment Of Resources refers to a situation where factors of production, such as labor and capital, are not being used in the production process.

Production Possibilities Curve

A graphical representation of the maximum quantities of two goods or services that an economy can produce when utilizing its resources fully and efficiently.