Suppose the Demand for Wine Is Elastic and That Initially

question 231

Multiple Choice

Suppose the demand for wine is elastic and that initially 5 million bottles of wine are produced and consumed in the United States. If the government imposes a tax of $2 per bottle of wine, the government will collect

• A) more than $10 million in tax revenues.
• B) $10 million in tax revenues.
• C) less than $10 million in tax revenues.
• D) an amount that may be more than, equal to, or less than $10 million in tax revenues depending on the precise elasticity of demand.

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Definitions:

Oligodendrocyte

A type of glial cell in the central nervous system that produces myelin, a substance that insulates nerve fibers to enhance signal transmission.

Myelin Sheath

A layer of protective insulation that covers nerve fibers, enhancing the speed and efficiency of electrical signal transmission along the nervous system.

CNS

Central Nervous System, comprised of the brain and spinal cord, responsible for processing and coordinating sensory information and motor commands.

PNS

Stands for Peripheral Nervous System, which includes all the nerves outside of the brain and spinal cord.