The Demand Curve for Rutabagas Is a Straight Line with Slope

question 30

Multiple Choice

The demand curve for rutabagas is a straight line with slope 26 and the supply curve is a straight line with slope 2.Suppose that a new tax of $3 per sack of rutabagas is introduced.

• A)The price received by suppliers falls by more than the price paid by demanders rises.
• B)The total number of rutabagas purchased increases.
• C)The price paid by demanders rises by the same amount as the price received by suppliers falls.
• D)The price paid by demanders rises by more than the price received by suppliers falls.
• E)The price paid by demanders rises by more than $3.

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Definitions:

Firm's Stock

The shares of ownership in a corporation that represent a claim on the company's earnings and assets.

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, often used by investors to gauge the income-generating ability of a stock.

Capital Gains Yield

The increase in the price of an investment or asset, expressed as a percentage of the initial purchase price.

Total Rate of Return

The comprehensive yield on an investment over a specific period, considering both capital gains and dividends or interest, expressed as a percentage of the initial investment.