Diana Is a Personal Trainer Whose Client Charles Pays $80

question 172

Multiple Choice

Diana is a personal trainer whose client Charles pays $80 per hour-long session.Charles values this service at $100 per hour,while the opportunity cost of Diana's time is $75 per hour.The government places a tax of $10 per hour on personal trainers.Before the tax,what is the total surplus?

• A)$25
• B)$20
• C)$5
• D)$0

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Definitions:

Income

The total amount of money or value received by an individual or entity, typically over a specific period, from various sources such as wages, investments, or sales.

Decrease in Demand

A reduction in consumers' willingness or ability to buy a product at any given price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level in a given period.

Market Quantity Demanded

Market quantity demanded is the total amount of a good or service that consumers are willing and able to purchase at a given price over a specific period.