Suppose a Tax of $5 Per Unit Is Imposed on a Good.The

question 214

Multiple Choice

Suppose a tax of $5 per unit is imposed on a good.The supply curve is a typical upward-sloping straight line,and the demand curve is a typical downward-sloping straight line.The tax decreases consumer surplus by $10,000 and decreases producer surplus by $15,000.The deadweight loss of the tax is $2,500.The tax decreased the equilibrium quantity of the good from

• A)6,500 to 5,500.
• B)5,500 to 4,500.
• C)5,000 to 3,000.
• D)6,000 to 4,000.

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Definitions:

Managerial Problem Solving

The process by which managers identify, analyze, and resolve issues that are impeding organizational performance.

Certainty

The state of being free from doubt or reservation, characterized by confidence in a fact, outcome, or condition.

Technical Failure

An issue or malfunction related to the technology or machinery in a system, project, or product, leading to disruption or non-performance.

Decision-Making Process

A systematic approach to making choices among alternatives based on the evaluation of their potential outcomes.