Figure 8-3 the Vertical Distance Between Points a and C Represents a Represents

question 176

Multiple Choice

Figure 8-3
The vertical distance between points A and C represents a tax in the market.
-Refer to Figure 8-3.Which of the following equations is valid for the tax revenue that the tax provides to the government?

• A)Tax revenue = (P2 - P1)xQ1
• B)Tax revenue = (P3 - P1)xQ1
• C)Tax revenue = (P3 - P2)xQ1
• D)Tax revenue = (P3 - P1)x(Q2 - Q1)

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Definitions:

T-bill

Short-term government securities issued at a discount from the face value and maturing at par, used to finance government debt.

Issue Date

The specific date on which a financial instrument is issued or becomes effective.

Simple Rate of Interest

Interest calculated only on the principal amount of a loan or deposit, without compounding.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically used for the financing of payroll, accounts payable, inventories, and meeting other short-term liabilities.