The Demand Curve for Rutabagas Is a Straight Line with Slope

question 30

Multiple Choice

The demand curve for rutabagas is a straight line with slope 26 and the supply curve is a straight line with slope 2.Suppose that a new tax of $3 per sack of rutabagas is introduced.

• A)The price received by suppliers falls by more than the price paid by demanders rises.
• B)The total number of rutabagas purchased increases.
• C)The price paid by demanders rises by the same amount as the price received by suppliers falls.
• D)The price paid by demanders rises by more than the price received by suppliers falls.
• E)The price paid by demanders rises by more than $3.

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Definitions:

Marginal Utility

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

Budget Line

Represents all the combinations of two goods that a consumer can afford given their prices and the consumer's income.

Indifference Curve

A graphical representation showing combinations of goods or services among which a consumer is indifferent, reflecting their preferences.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, and other income sources.