Use the Following to Answer Questions

question 211

Multiple Choice

Use the following to answer questions:
Figure: The Gasoline Market
-(Figure: The Gasoline Market) Look at the figure The Gasoline Market. The pretax equilibrium price is $3, and the equilibrium quantity before tax is 20,000 gallons. An excise tax has been levied on each gallon of gasoline, shifting the supply curve upward. The deadweight loss from this tax is equal to:

• A) $1.50.
• B) $5,000.
• C) $15,000.
• D) $4,375.

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Definitions:

Employer

An individual or entity that hires and pays people to perform specific jobs or services.

Independent Contractor

A person who is hired to perform a task for another but who is not the other’s employee.

Employee

An individual who works for an employer and is entitled to receive compensation in exchange for their labor or services.

Independent Contractor

An individual who provides services to another entity under terms specified in a contract or within a verbal agreement, unlike an employee who works regularly for a single employer.