Figure 57 Figure 5

question 30

Multiple Choice

Figure 5.7 Figure 5.7 shows the market for beer.The government plans to impose a unit tax in this market.
-Refer to Figure 5.7.As a result of the tax, is there a loss in consumer surplus?

• A)Yes, because consumers are paying a price above the economically efficient price.
• B)No, because the producer pays the tax.
• C)No, because the market reaches a new equilibrium.
• D)No, because consumers are charged a lower price to cover their tax burden.

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Definitions:

General Partner

A type of owner in a partnership who has unlimited liability and is actively involved in the management of the business.

Entrepreneur

An individual who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Entrepreneurs

Individuals who create, launch, and manage new businesses, often taking on considerable risk in the expectation of profit.

Bankruptcy

A legal process involving a person or business that is unable to repay outstanding debts, resulting in the distribution of assets to creditors.