Leonard, Sheldon, Raj, and Penny Each Like to Attend Comic-Book

question 76

Multiple Choice

Leonard, Sheldon, Raj, and Penny each like to attend comic-book conventions. The price of a ticket to a convention is $50. Leonard values a ticket at $70, Sheldon at $65, Raj at $60, and Penny at $55. Suppose that if the government taxes tickets at $5 each, the price will rise to $55. A consequence of the tax is that consumer surplus shrinks by

• A)$50 and tax revenues increase by $20, so there is a deadweight loss of $30.
• B)$30 and tax revenues increase by $20, so there is a deadweight loss of $10.
• C)$20 and tax revenues increase by $20, so there is no deadweight loss.
• D)$50 and tax revenues increase by $20, so there is no deadweight loss.

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Definitions:

Resources

Assets, materials, and other components necessary for a company or individual to function effectively.

Planning Steps

The sequential actions or stages involved in devising a plan, including goal setting, strategy formulation, and action planning.

Planning Process

A systematic approach to defining goals, developing strategies, and outlining tasks and schedules to accomplish the objectives.

Enhance Results

To improve or increase the quality, value, or extent of outcomes.