Suppose a Tax of $3 Per Unit Is Imposed on a Good.The

question 162

Multiple Choice

Suppose a tax of $3 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 $3,900 and decreases producer surplus by $3,000.The tax generates tax revenue of $6,000.The tax decreased the equilibrium quantity of the good from

• A)2,000 to 1,500.
• B)2,400 to 2,000.
• C)2,600 to 2,000.
• D)3,000 to 2,400.

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Definitions:

Defined Benefit Plans

Pension plans that promise a specified retirement benefit amount, which is determined by factors such as salary history and duration of employment.

Interest Cost Component

The portion of pension expense that represents the increase in the projected benefit obligation due to the passage of time.

Projected Benefit Obligation

An estimate of the total amount an entity is obligated to pay in pension benefits, based on expected future salary increases.

Discount Rate

The interest rate used to discount future cash flows to present value, often used in the calculation of net present value or investment appraisals.