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Refer to Scenario 19

Question 119

Multiple Choice

Refer to Scenario 19.2 below to answer the questions that follow.
SCENARIO 19.2: The current lowest cost method of producing brown paper bags is $5.00 per 100 bags. The government imposes a $0.50 tax per unit of labor. After the tax is imposed, paper bag producers will use two units of labor to produce 100 paper bags. This increases the cost of paper-bag production to $6.50 per 100 bags.
-Refer to Scenario 19.2. If 1,000 paper bags are sold, the total tax revenue collected is


A) $10.00.
B) $50.00.
C) $250.00.
D) $500.00.

Correct Answer:

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