Use the Figure Below to Answer the Following Question

question 47

Multiple Choice

Use the figure below to answer the following question.

Figure 17.2.3
-Refer to Figure 17.2.3. The graph provides information about a waste disposal system in a city of 1 million people. If the city installs the efficient capacity, then each person pays ________ in taxes.

• A)$125
• B)$62.50
• C)$250
• D)zero
• E)$31.25

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Definitions:

Inflation Rate

The rise in the cost of goods and services across an economy over a specific period, expressed as a percentage.

Potential GDP

An estimate of the maximum level of economic activity that an economy can sustain over the long term without increasing inflation.

Labor Force

Comprises all the working-age population that is employed and those unemployed but seeking employment.

Rational Expectations

The economic theory that assumes individuals make predictions about the future based on all available information and in a way that is systematically correct.