Figure 18-2 Shows a Demand Curve and Two Sets of Supply

question 91

Multiple Choice

Figure 18-2 shows a demand curve and two sets of supply curves,one set more elastic than the other.
-Refer to Figure 18-2.If the government imposes an excise tax of $1.00 on every unit sold

• A)the deadweight loss is identical under either supply curve.
• B)the deadweight loss is greater under the supply curve S1.
• C)the deadweight loss is greater under the supply curve S0.
• D)there is no deadweight loss since revenue raised is used to fund government projects.

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Definitions:

Product Alpha

A term often used to define the first version or iteration of a product, typically before it is released to the general public for feedback.

Marginal Utility

The additional satisfaction or utility that a person receives from consuming one more unit of a good or service.

Utility-Maximizing Rule

An economic principle stating that consumers allocate their income to purchase the combination of goods and services that maximizes their utility.

Consumption Mix

The combination of goods and services consumed by an individual or in an economy, reflecting preferences, income levels, and other factors.