Question

Person

Value of a Weekend Ski Trip

(Dollars)

Anna 150
Brian 90
Clem 75
Dave 50
​




Refer to Table 13-1 . Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. How much tax revenue is collected from these four skiers?

a. $48
b. $36
c. $12
d. $0

Answer 1

To calculate the tax revenue collected from the four skiers, we need to determine the number of skiers who continue to go skiing after the tax is imposed and then multiply it by the amount of tax per skier.

The skiers who will continue skiing after the tax is imposed are those who value the ski trip higher than the increased price of the ski pass.

Given the values of the skiers for the weekend ski trip, we can see that Anna ($150) and Brian ($90) will still choose to go skiing even with the increased price. Clem ($75) and Dave ($50), on the other hand, will not go skiing due to the increased price.

Therefore, the tax revenue collected will be the tax per skier multiplied by the number of skiers who continue to ski. In this case, the tax per skier is $12, and the number of skiers who continue to ski is 2 (Anna and Brian).

Tax revenue = Tax per skier * Number of skiers who continue to ski

= $12 * 2

= $24

Therefore, the correct answer is not provided among the options given. The tax revenue collected from these four skiers is $24.