Table 12-3 -Refer to Table 12-3.If the Government Imposes a $2.00 Tax

question 57

Multiple Choice

Table 12-3

-Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,why does a deadweight loss arise

• A)Jennifer will pay more tax as a percentage of her value of Delights than Tsering.
• B)Tsering must pay the $2.00 tax from his consumer surplus.
• C)Tsering will have to pay a higher price for Delights.
• D)Jennifer will leave the market.

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Definitions:

Technological Changes

Innovations or improvements in technology that affect productivity, efficiency, and competitiveness in an industry or economy.

Index Number

A statistical measure that shows changes in a variable or group of variables over time, often used for economic data analysis.

Parity Concept

A principle stating that different currencies should have the same purchasing power in different countries, once adjusted for exchange rates.

Parity Ratio

The ratio between the prices of various goods or services, often used in agriculture and trade to compare values.