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

question 386

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.How much tax revenue will be generated from sales to Jim and Joan?

• A) zero
• B) $4
• C) $8
• D) $12

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Definitions:

Depression

A mental health disorder characterized by persistently low mood, lack of interest in activities, and other symptoms that impair daily functioning.

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Stimuli or events that provoke a psychological reaction, often related to past trauma or deeply ingrained habits.

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Episodes of increased asthma symptoms, such as coughing, wheezing, shortness of breath or tightness in the chest, resulting from inflammation and constriction of the airways.

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