Scenario 12-3 Suppose Roger and Regina Receive Great Satisfaction from Their Consumption

question 156

Multiple Choice

Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice, $9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $2 tax on each slice of cheesecake and that the new equilibrium price is $7. What is the deadweight loss of the tax?

• A)zero
• B)$3
• C)$6
• D)$8

Recognize the risks and consequences of substance abuse among adolescents.

Understand the impact of societal and peer influences on adolescent behavior and development.

Explain the physiological processes involved in puberty and their effects on development.

Analyze the factors influencing academic performance and decisions to drop out of school.

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Definitions:

Actual Output

Actual output refers to the real GDP or the total value of all goods and services produced in an economy at a given time, contrasting with potential output.

Expected Price Level

The anticipation or forecast of future prices across an economy, affecting consumer and business decisions.

Long-Term Contracts

Agreements that extend over a significant period of time, often involving commitments to buy or sell goods or services or to provide employment.

Recessionary Gaps

Situations where an economy's actual output is less than its potential output, often characterized by unemployment and underutilized resources.