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.

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Definitions:

Peptidoglycan

A polymer consisting of sugars and amino acids that forms a mesh-like layer outside the plasma membrane of most bacteria, providing structural support and shape.

Archaea

A domain of single-celled microorganisms that are similar to bacteria but have unique genetic, biochemical, and physiological characteristics.

Bacteria

Microorganisms that are often single-celled, which can be found in various environments, and can have beneficial or harmful effects on other organisms.

Protobionts

Hypothetical precursors to living cells, consisting of self-organized spheres of organic molecules, instrumental in the origin of life.