Kyle Places a $10 Value on a Glass of Red

question 207

Multiple Choice

Kyle places a $10 value on a glass of red wine,and Keith places an $8 value on it.If there is no tax on glasses of red wine,the price of a glass of red wine reflects the cost of making it.The equilibrium price for a glass of red wine is $6.Suppose the government levies a tax of $3 on each glass of red wine,and the equilibrium price of a glass of red wine increases to $9.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.

---

Definitions:

Precautions

Measures or actions taken in advance to prevent harm or injury, or to ensure safety.

Young Persons

Individuals in the early stages of life, typically considered to be below the age of adulthood, whose care and protection are often emphasized in societal and legal contexts.

Inject Drugs

The act of administering drugs directly into the bloodstream through a needle and syringe.

Risky Sexual Behaviors

Actions that increase the likelihood of contracting sexually transmitted infections (STIs) and/or unintended pregnancy, such as having multiple partners or unprotected sex.