Scenario 12-1 Suppose Jim and Joan Receive Great Satisfaction from Their Consumption

question 85

Multiple Choice

Scenario 12-1
Suppose Jim and Joan receive great satisfaction from their consumption of cheesecake.Joan would be willing to purchase only one slice and would pay up to $6 for it.Jim would be willing to pay $9 for his first slice,$7 for his second slice,and $3 for his third slice.The current market price is $3 per slice.
-Refer to Scenario 12-1.Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $7.What is the deadweight loss of the tax?

• A) $3
• B) $6
• C) $8
• D) $9

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Definitions:

Pilot Study

A small-scale preliminary study conducted to evaluate feasibility, time, cost, risk, and adverse events, used to improve the design of a future full-scale research project.

Cross-Cultural Fairness

In assessment or testing, the principle of ensuring that tools and practices are equitable and do not favor one cultural group over others.

Item Response Theory

A theory and method in psychometrics that models the relationship between individuals' abilities or latent traits and their item responses, considering the properties of the items themselves.