Scenario 12-2 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption

question 111

Multiple Choice

Scenario 12-2
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-2.Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9.How much tax revenue will be generated from sales to Regina and Roger?

• A) zero
• B) $4
• C) $8
• D) $12

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Definitions:

Conversion Reaction

A psychological response where emotional distress is expressed through physical symptoms.

Irrational Fear

A fear that is disproportionate to the actual danger posed, often a symptom of anxiety disorders.

Mania

A mental state characterized by periods of great excitement, euphoria, delusions, and overactivity.

Obsession

A persistent, involuntary thought, image, or impulse that invades consciousness and causes great distress.