Adam,Barb,and Carli Each Like to Read Novels

question 172

Multiple Choice

Adam,Barb,and Carli each like to read novels.The current bestseller costs $10.Adam values it at $15,Barb at $13,and Carli at $11.Suppose that if the government taxes books at $2 each,the selling price will rise to $12.A consequence of the tax is that

• A) consumer surplus shrinks by $4 and tax revenues increase by $6,so there is a deadweight loss of $2.
• B) consumer surplus shrinks by $6 and tax revenues increase by $6,so there is no deadweight loss.
• C) consumer surplus shrinks by $5 and tax revenues increase by $6,so there is no deadweight loss.
• D) consumer surplus shrinks by $5 and tax revenues increase by $4,so there is a deadweight loss of $1.

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Definitions:

Hypnosis

A trance-like state of focus and concentration achieved with the help of a therapist, used for therapeutic purposes.

Brain Imaging

The use of various techniques to visually capture the structure or function of the brain, often used for diagnostic or research purposes.

Altered Consciousness

A change in one’s normal mental state, possibly due to drugs, trauma, meditation, or sleep deprivation.

FDA

The Food and Drug Administration, a government agency responsible for regulating food, drugs, medical devices, and other health-related products in the United States.