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

question 164

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 $2 tax on each slice of cheesecake and that the new equilibrium price is $5.What is the deadweight loss of the tax?

• A) zero
• B) $3
• C) $6
• D) $8

---

Definitions:

Proportions

A statistical measure that reflects the relative size of one part compared to the whole, often expressed as a fraction or percentage.

Proportion of Female Managers

The percentage of managerial positions in an organization or sector that are occupied by women.

Null and Alternative Hypotheses

In hypothesis testing, the null hypothesis is a statement of no effect or no difference, and the alternative hypothesis is the statement that researchers seek to provide evidence for.

One-Sample Test

A statistical test used to determine whether a sample mean significantly differs from a known or hypothesized population mean.