45. Which of the following events is consistent with an increase in the deadweig

Question

45. Which of the following events is consistent with an increase in the deadweight loss of the gasoli million to $120 million? a. The tax on gasoline increases from S0.30 per gallon to $0.60 per gallon. -b. The tax on gasoline increases from S0.25 per gallon to $0.45 per gallon. c. The tax on gasoline increases from $0.30 per gallon to $0.45 per gallon. d. The tax on gasoline increases from S0.25 per gallon to $1.00 per gallon. Table 3-3 Production Opportunities lours Needed to Make 1 Unit of Cheese Number of Units Produced in 40 Hours Cheese 40 Wine England 1 France 4 2 Wine 10 20 46. Refer to Table 3-3. Which of the following combinations of cheese and wine could England not produce in 40 hou a. 26 units of cheese and 4 units of wine b. 20 units of cheese and 5 units of wine c. 16 units of cheese and 6 units of wine d. 12 units of cheese and 7 units of wine

Explanation / Answer

(45) Data are missing.

(46) (a)

We compute the total number of hours taken to produce the mentioned bundles of Cheese (C) & Wine (W).

Hours taken for (26C, 4W) = 26 x 1 + 4 x 4 = 26 + 16 = 42 (. 40 hours)

Hours taken for (20C, 5W) = 20 x 1 + 5 x 4 = 20 + 20 = 40

Hours taken for (16C, 6W) = 16 x 1 + 6 x 4 = 16 + 24 = 40

Hours taken for (12C, 7W) = 12 x 1 + 7 x 4 = 12 + 28 = 40

So, bundle (a) is not attainable.

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