Scenario 12-1 Suppose Jim and Joan Receive Great Satisfaction from Their Consumption

question 189

Multiple Choice

Scenario 12-1
Suppose Jim and Joan receive great satisfaction from their consumption of cheesecake.Joan would be willing to purchase only one slice and would pay up to $6 for it.Jim would be willing to pay $9 for his first slice,$7 for his second slice,and $3 for his third slice.The current market price is $3 per slice.
-Refer to Scenario 12-1.Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $7.What is Joan's consumer surplus from cheesecake?

• A) zero
• B) $2
• C) $3
• D) $6

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Definitions:

Retirement

The period in life when one chooses to permanently leave the workforce behind, often due to age or health.

Family Decision Making

The process through which family members collectively make choices about consumption-related matters, considering the preferences and needs of all involved.

Joint

A joint typically refers to a point where two bones are connected in the body, but in business context, it could imply a venture undertaken by two or more parties who share ownership and profits.

Spouse-dominant

A decision-making dynamic in households where one spouse predominantly makes the purchasing decisions.