Zoe,Chloe,and Brody Each Like to Read Novels

question 43

Multiple Choice

Zoe,Chloe,and Brody each like to read novels.The current mystery thriller costs 10 dinars.Zoe values it at 15 dinars,Chloe at 13 dinars,and Brody at 11 dinars.Suppose that if the government taxes books at 0.50dinarseach,the selling price rises to 10.50 dinars.A consequence of the tax is that

• A)consumer surplus shrinks by 1.50 and tax revenues increase by 1.50,so there is no deadweight loss.
• B)consumer surplus shrinks by 9.00 and tax revenues increase by 1.50,so there is a deadweight loss of 7.50.
• C)consumer surplus shrinks by 7.50 and tax revenues increase by 7.50,so there is no deadweight loss.
• D)consumer surplus shrinks by 7.50 and tax revenues increase by 1.50,so there is a deadweight loss of 6.

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Definitions:

Child Support Payments

Financial contributions required by law to be paid by a non-custodial parent to support the wellbeing and living expenses of their children.

Secured Creditors

Creditors who are given a security interest in an asset of the debtor, which provides them with the right to seize the asset if the debt is not repaid according to agreed terms.

Automatic Stay

A provision in bankruptcy law that halts actions by creditors to collect debts from a debtor who has declared bankruptcy.

Adequate Protection

A principle in bankruptcy law that ensures creditors receive protection against the depreciation of their collateral during a bankruptcy case.