Scenario 12-1 Skip Places a $20 Value on a Bottle of Wine

question 148

Multiple Choice

Scenario 12-1
Skip places a $20 value on a bottle of wine, and Walt places a $17 value on it. The equilibrium price for a bottle of wine is $15.
-Refer to Scenario 12-1.Suppose the government levies a tax of $1 on each bottle of wine,and the equilibrium price of a bottle of wine increases to $16.What is total consumer surplus after the tax is levied?

• A) $2
• B) $3
• C) $4
• D) $5

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Definitions:

Self-awareness

Self-awareness is the conscious knowledge of one's own character, feelings, motives, and desires, enabling introspection and recognition of one's own emotional state.

Drive

A natural, genetically programmed impulse to achieve an objective or fulfill a desire.

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Physical movements of the stomach muscles that aid in the digestion process.

Cannon's Hypothesis

A theory suggesting that emotions originate in the thalamus, which sends signals simultaneously to the cerebral cortex (producing the conscious experience of emotion) and the autonomic nervous system (producing physiological arousal).