Assume the Supply Curve for Diapers Is a Typical,upward-Sloping Straight

question 56

Multiple Choice

Assume the supply curve for diapers is a typical,upward-sloping straight line,and the demand curve for diapers is a typical,downward-sloping straight line.Suppose the equilibrium quantity in the market for diapers is 1,000 per month when there is no tax.Then a tax of $0.50 per diaper is imposed.The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40.The government's tax revenue amounts to $475 per month.Which of the following statements is correct?

• A)After the tax is imposed,the equilibrium quantity of diapers is 900 per month.
• B)The demand for diapers is more elastic than the supply of diapers.
• C)The deadweight loss of the tax is $12.50.
• D)The tax causes a decrease in consumer surplus of $380.

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Definitions:

Engelhardt

Refers to an individual or concept relevant to a specific scholarly or professional field, possibly associated with ethics or philosophy, requiring additional context for specificity.

Impaired Newborns

Impaired newborns are infants experiencing health issues due to congenital disabilities, infection, injury during birth, or prematurity that affect their normal body functions.

Moral Duty

An obligation to act in a way considered morally right, often based on societal norms, ethical principles, or personal beliefs.

Tristram Engelhardt Jr.

An American philosopher known for his contributions to bioethics, emphasizing the moral pluralism and conflicts in modern healthcare.