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20 July, 10:19

avid walks Carolyn's dog once a day for $50 per week. Carolyn values this service at $60 per week, while the opportunity cost of David's time is $30 per week. The government places a tax of $35 per week on dog walkers. Before the tax, what is the total surplus? a. $25 b. $50 c. $60 d. $30

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  1. 20 July, 10:36
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    Answer: d. $30

    Explanation:

    Surplus available to Carolyn before tax

    = $60-$50 = $10

    Surplus available to Avid before tax

    = $50-$30 = $20

    Total surplus available before tax

    = $20 + $10 = $30

    This is due to no dog walking taking place.
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Home » Business » avid walks Carolyn's dog once a day for $50 per week. Carolyn values this service at $60 per week, while the opportunity cost of David's time is $30 per week. The government places a tax of $35 per week on dog walkers.
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