Use the following to answer question:
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 9 million rides is imposed,the quota rent that will accrue to the owner of a taxi medallion will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.
A)$1;1
B)$2;2
C)$3;3
D)$4;4

Question

Use the following to answer question: 
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 9 million rides is imposed,the quota rent that will accrue to the owner of a taxi medallion will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.
A)$1;1 
B)$2;2 
C)$3;3 
D)$4;4

Quizplus · Accepted Answer

The quota rent is the difference between the price with the quota and the price without the quota. The price with the quota is $10, and the price without the quota is $8. Therefore, the quota rent is $10 - $8 = $2.The total missed opportunity is the difference between the quantity with the quota and the quantity without the quota. The quantity with the quota is 9 million rides, and the quantity without the quota is 12 million rides. Therefore, the total missed opportunity is 12 million rides - 9 million rides = 3 million rides.

Use the Following to Answer Question