Kyle Places a $10 Value on a Glass of Red

question 31

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 $2 on each glass of red wine,and the equilibrium price of a glass of red wine increases to $8.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 dead weight 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:

Lot-For-Lot

An inventory replenishment strategy where the order quantity matches exactly the demand for the next period, aiming to minimize holding costs.

Gross Requirements

The total amount of materials or products needed to meet the production schedule without accounting for any inventories on hand.

Lead Time

The amount of time that elapses between the initiation and completion of a process or project.

Time-Phased Product Structure

A detailed breakdown that shows the timeline on which components must be assembled or produced to complete a final product.