Figure 8-7 the Vertical Distance Between Points a and B Represents a Represents

question 124

Multiple Choice

Figure 8-7
The vertical distance between points A and B represents a tax in the market.

-Refer to Figure 8-7.Suppose a 22nd unit of the good were sold by a seller to a buyer.Which of the following statements is correct?

• A) For the 22nd unit, the difference between the buyer's value and the seller's cost is less than the tax per unit.
• B) For the 22nd unit, the difference between the buyer's value and the seller's cost is greater than the tax per unit.
• C) For the 22nd unit, the difference between the buyer's value and the seller's cost is equal to the tax per unit.
• D) It makes sense for the buyer to buy and for the seller to sell the 22nd unit, with or without the tax in place.

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Definitions:

Subtle Effect

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