Use the Figure Below to Answer the Following Question(s)

question 143

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-9

Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b and a $.40 excise tax is illustrated. What does the triangular area abc represent?

• A) the revenue the government derives from the tax
• B) the tax paid by consumers
• C) the tax paid by producers
• D) the deadweight loss (or excess burden) created by the tax

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Definitions:

Economies of Scale

Cost advantages that businesses obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Benefits Package

A collection of non-wage compensations provided to employees in addition to their salaries or wages. These can include health insurance, pension plans, and vacation time.

Mandatory Benefits

Compulsory employment advantages prescribed by law that an employer must provide to employees, such as social security, workers' compensation, and leave entitlements.

Employment Assistance Programs

Workplace initiatives designed to help employees deal with personal problems that might adversely affect their job performance, health, and well-being.