Scenario 12-1 Max and Mark Enjoy Beer. Max Places a $23 Value

question 38

Multiple Choice

Scenario 12-1
Max and Mark enjoy beer. Max places a $23 value on a bottle of beer, and Mark places a $18 value on it. The equilibrium price for a bottle of beer is $14.
-Refer to Scenario 12-1. Suppose the government levies a tax of $6 on each bottle of beer, and the equilibrium price of a bottle of beer increases to $20. Because total consumer surplus has

• A)fallen by more than the tax revenue, the tax has a deadweight loss.
• B)fallen by less than the tax revenue, the tax has no deadweight loss.
• C)fallen by exactly the amount of the tax revenue, the tax has no deadweight loss.
• D)increased by less than the tax revenue, the tax has a deadweight loss.

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Definitions:

Tranquil Mind

A state of mental calm and clarity, free from agitation, stress, or anxiety.

Unlimited Pleasure

The concept of seeking pleasure without any constraints or consideration of possible negative consequences.

Epicurus

An ancient Greek philosopher known for his emphasis on simple pleasures, friendship, and the pursuit of happiness through knowledge.

Hedonists

Individuals or philosophies that prioritize pleasure or happiness as the highest good.