Suppose Motorland's government imposes a tax of $1.50 per gallon of gasoline sold. With the tax, the market will
A) underproduce by 0.2 million gallons of gasoline a month.
B) underproduce by 0.1 million gallons of gasoline a month.
C) overproduce by 0.1 million gallons of gasoline a month.
D) produce the efficient quantity of gasoline.
D
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With each 99 cent iTunes download, GDP
A) rises by 99 cents. B) falls by 99 cents. C) remains unchanged. D) is impossible to measure with this sale because nothing physical has been produced.
Consumer surplus:
a. is minimized in market equilibrium. b. measures the value between the actual selling price of a product and the price at which sellers are willing to sell the product. c. measures the value between the price consumers are willing to pay for a product and the price they actually pay. d. measures the price at which sellers extract excess profits from consumers.