Answer: Economic choices result in trade-offs.
Explanation:
The chart simply purports to show that when making economic decisions, you will have to accept trade-offs because resources are not infinite.
For instance, in order to expand, you will need to take on more financial risk. In that same vein, in order to serve more people, you will have to divide time between two stalls and might end up closing a stall.
Trade-offs simply have to be made.
Answer:
option (c) $600
Explanation:
Given:
Tax = $4 per unit
Initial equilibrium quantity = 2,000 units
Final equilibrium quantity = 1,700 units
Decrease in consumer surplus = $3,000
Decrease in consumer surplus = $4,400
Now,
Deadweight Loss is calculated using the formula:
Deadweight loss
= × Tax × (Original equilibrium quantity - New equilibrium quantity)
on substituting the respective values, we get
Deadweight loss = × 4 × (2,000 - 1,700)
or
Deadweight loss = 2 × (3) = $600
Hence,
the correct answer is option (c) $600