Refer to Figure 4-15. As a result of the tax, is there a loss in ...

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Refer to Figure 4-15. As a result of the tax, is there a loss in consumer surplus?
 
  A) No, because the producer pays the tax.
  B) No, because the market reaches a new equilibrium
  C) No, because consumers are charged a lower price to cover their tax burden.
  D) Yes, because consumers pay a price above the economically efficient price.

Question 2

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that
 
  A) the demand for tarot card readers has increased.
  B) the law of demand has been violated.
  C) the number of tarot card readers has increased.
  D) tarot card readers are deliberately charging high prices because they provide services for superstitious clients.

[Pamela.irrgang@yahoo.com]

Answer to Question 1

D

Answer to Question 2

A

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TYSM

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Gracias!