Suppose the demand for wine is elastic and that initially 5 ...

[09madisonrousseau09]

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.

Question 2

By reviewing its sales records, Dell economists discover that when Dell lowers the price of its personal computers, the total revenue Dell obtains from the sale of its personal computers rises. Hence
 
  A) supply of Dell personal computers is elastic.
  B) demand for Dell personal computers is elastic.
  C) supply of Dell personal computers is inelastic.
  D) demand for Dell personal computers is inelastic.

[josephsuarez]

Answer to Question 1

C

Answer to Question 2

B

[09madisonrousseau09]

Thanks for the timely response, appreciate it

[mohan]

Great answer, keep it coming