Question 1

Figure 8-4
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-4.The per-unit burden of the tax on buyers is

Accepted Answer

A)   $3.
B)   $4.
C)   $5.
D)   $8.E) None of the above
F) A) and C)

Question 2

Suppose a tax of $1 per unit is imposed on a good.The more elastic the supply of the good,other things equal,the

Accepted Answer

A)   smaller is the response of quantity supplied to the tax.
B)   larger is the tax burden on sellers relative to the tax burden on buyers.
C)   larger is the deadweight loss of the tax.
D)   All of the above are correct.E) A) and C)
F) A) and D)

Question 3

If a tax shifts the demand curve upward (or to the right) ,we can infer that the tax was levied on

Accepted Answer

A)   buyers of the good.
B)   sellers of the good.
C)   both buyers and sellers of the good.
D)   We cannot infer anything because the shift described is not consistent with a tax.E) All of the above
F) A) and B)

Question 4

Figure 8-3 
-Refer to Figure 8-3.How much is producer surplus at the market equililbrium?

Accepted Answer

Producer s...

Question 5

Taxes are of interest to

Accepted Answer

A)   microeconomists because they consider how to balance equality and efficiency.
B)   microeconomists because they consider how best to design a tax system.
C)   macroeconomists because they consider how policymakers can use the tax system to stabilize economic activity.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 6

Other things equal,the deadweight loss of a tax

Accepted Answer

A)   decreases as the size of the tax increases.
B)   increases as the size of the tax increases,but the increase in the deadweight loss is less rapid than the increase in the size of the tax.
C)   increases as the size of the tax increases,and the increase in the deadweight loss is more rapid than the increase in the size of the tax.
D)   increases as the price elasticities of demand and/or supply increase,but the deadweight loss does not change as the size of the tax increases.E) A) and D)
F) A) and C)

Question 7

When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.

Accepted Answer

A) True 
 B)False

Question 8

A tax raises the price received by sellers and lowers the price paid by buyers.

Accepted Answer

A) True 
 B)False

Question 9

Figure 8-7
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-7.Which of the following statements is correct?

Accepted Answer

A)   The loss of producer surplus that is associated with some sellers dropping out of the market as a result of the tax is $30.
B)   The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is $60.
C)   The loss of consumer surplus caused by this tax exceeds the loss of producer surplus caused by this tax.
D)   This tax produces $200 in tax revenue for the government.E) A) and B)
F) None of the above

Question 10

For a good that is taxed,the area on the relevant supply-and-demand graph that represents government's tax revenue is

Accepted Answer

A)   smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax.
B)   bounded by the supply curve,the demand curve,the effective price paid by buyers,and the effective price received by sellers.
C)   a right triangle.
D)   a triangle,but not necessarily a right triangle.E) C) and D)
F) A) and B)

Question 11

Figure 8-11 1 = 4;Q2 = 7;P1 = $6;P2 = $8;and P3 = $10.Then,when the tax is imposed, A)  consumer surplus decreases by $11. B)  producer surplus decreases by $11. C)  the deadweight loss amounts to $6. D)  All of the above are correct." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 8-11.Suppose Q1 = 4;Q2 = 7;P1 = $6;P2 = $8;and P3 = $10.Then,when the tax is imposed,

Accepted Answer

A)   consumer surplus decreases by $11.
B)   producer surplus decreases by $11.
C)   the deadweight loss amounts to $6.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 12

Suppose Ashley needs a dog sitter so that she can travel to her sister's wedding.Ashley values dog sitting for the weekend at $200.Cami is willing to dog sit for Ashley so long as she receives at least $150.Ashley and Cami agree on a price of $175.Suppose the government imposes a tax of $10 on dog sitting.The tax has made Ashley and Cami worse off by a total of

Accepted Answer

A)   $50.
B)   $40.
C)   $20.
D)   $10.E) A) and D)
F) All of the above

Question 13

Diana is a personal trainer whose client Charles pays $80 per hour-long session.Charles values this service at $100 per hour,while the opportunity cost of Diana's time is $75 per hour.The government places a tax of $10 per hour on personal trainers.Before the tax,what is the total surplus?

Accepted Answer

A)   $25
B)   $20
C)   $5
D)   $0E) B) and D)
F) B) and C)

Question 14

Figure 8-9
The vertical distance between points A and C represent a tax in the market. 
-Refer to Figure 8-9.The per-unit burden of the tax on sellers is

Accepted Answer

A)   $20.
B)   $200.
C)   $300.
D)   $500.E) C) and D)
F) None of the above

Question 15

A tax on a good causes the size of the market to increase.

Accepted Answer

A) True 
 B)False

Question 16

Figure 8-10 
-Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.Without the tax,the consumer surplus is

Accepted Answer

A)   (P0-P2) x Q2.
B)   x (P0-P2) x Q2.
C)   (P0-P5) x Q5.
D)   x (P0-P5) x Q5.E) All of the above
F) A) and B)

Question 17

Figure 8-1 
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The loss of producer surplus resulting from this tax is

Accepted Answer

A)   $5.50.
B)   $17.50.
C)   $22.50.
D)   $45.00E) C) and D)
F) B) and C)

Question 18

What happens to the total surplus in a market when the government imposes a tax?

Accepted Answer

A)   Total surplus increases by the amount of the tax.
B)   Total surplus increases but by less than the amount of the tax.
C)   Total surplus decreases.
D)   Total surplus is unaffected by the tax.E) A) and B)
F) None of the above

Question 19

Figure 8-3 
-Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is the deadweight loss from this tax?

Accepted Answer

The deadwe...

Question 20

Economists use the government's tax revenue to measure the public benefit from a tax.

Accepted Answer

A) True 
 B)False

Exam 8: Application: The Costs of Taxation

Figure 8-10 -Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.Without the tax,the consumer surplus is

Correct Answer
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Economists use the government's tax revenue to measure the public benefit from a tax.

Correct Answer
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Figure 8-9 The vertical distance between points A and C represent a tax in the market. -Refer to Figure 8-9.The per-unit burden of the tax on sellers is

Correct Answer
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Suppose a tax of $1 per unit is imposed on a good.The more elastic the supply of the good,other things equal,the

Correct Answer
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A tax raises the price received by sellers and lowers the price paid by buyers.

Correct Answer
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Diana is a personal trainer whose client Charles pays $80 per hour-long session.Charles values this service at $100 per hour,while the opportunity cost of Diana's time is $75 per hour.The government places a tax of $10 per hour on personal trainers.Before the tax,what is the total surplus?

Correct Answer
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Figure 8-4 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-4.The per-unit burden of the tax on buyers is

Correct Answer
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Figure 8-3 -Refer to Figure 8-3.How much is producer surplus at the market equililbrium?

Correct Answer
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Producer s...
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A tax on a good causes the size of the market to increase.

Correct Answer
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When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.

Correct Answer
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Taxes are of interest to

Correct Answer
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What happens to the total surplus in a market when the government imposes a tax?

Correct Answer
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Figure 8-1 -Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The loss of producer surplus resulting from this tax is

Correct Answer
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If a tax shifts the demand curve upward (or to the right) ,we can infer that the tax was levied on

Correct Answer
verified

Figure 8-3 -Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is the deadweight loss from this tax?

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The deadwe...
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Figure 8-7 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-7.Which of the following statements is correct?

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Figure 8-11 -Refer to Figure 8-11.Suppose Q₁ = 4;Q₂ = 7;P₁ = $6;P₂ = $8;and P₃= $10.Then,when the tax is imposed,

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Other things equal,the deadweight loss of a tax

Correct Answer
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For a good that is taxed,the area on the relevant supply-and-demand graph that represents government's tax revenue is

Correct Answer
verified

Exam 8: Application: The Costs of Taxation

Figure 8-10 -Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.Without the tax,the consumer surplus is

Correct AnswerverifiedShow Answer

Economists use the government's tax revenue to measure the public benefit from a tax.

Correct AnswerverifiedShow Answer

Figure 8-9 The vertical distance between points A and C represent a tax in the market. -Refer to Figure 8-9.The per-unit burden of the tax on sellers is

Correct AnswerverifiedShow Answer

Suppose a tax of $1 per unit is imposed on a good.The more elastic the supply of the good,other things equal,the

Correct AnswerverifiedShow Answer

A tax raises the price received by sellers and lowers the price paid by buyers.

Correct AnswerverifiedShow Answer

Diana is a personal trainer whose client Charles pays $80 per hour-long session.Charles values this service at $100 per hour,while the opportunity cost of Diana's time is $75 per hour.The government places a tax of $10 per hour on personal trainers.Before the tax,what is the total surplus?

Correct AnswerverifiedShow Answer

Figure 8-4 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-4.The per-unit burden of the tax on buyers is

Correct AnswerverifiedShow Answer

Figure 8-3 -Refer to Figure 8-3.How much is producer surplus at the market equililbrium?

Correct AnswerverifiedProducer s...View AnswerShow Answer

A tax on a good causes the size of the market to increase.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.

Correct AnswerverifiedShow Answer

Taxes are of interest to

Correct AnswerverifiedShow Answer

What happens to the total surplus in a market when the government imposes a tax?

Correct AnswerverifiedShow Answer

Figure 8-1 -Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The loss of producer surplus resulting from this tax is

Correct AnswerverifiedShow Answer

If a tax shifts the demand curve upward (or to the right) ,we can infer that the tax was levied on

Correct AnswerverifiedShow Answer

Figure 8-3 -Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is the deadweight loss from this tax?

Correct AnswerverifiedThe deadwe...View AnswerShow Answer

Figure 8-7 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-7.Which of the following statements is correct?

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Figure 8-11 -Refer to Figure 8-11.Suppose Q1 = 4;Q2 = 7;P1 = $6;P2 = $8;and P3 = $10.Then,when the tax is imposed,

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Other things equal,the deadweight loss of a tax

Correct AnswerverifiedShow Answer

For a good that is taxed,the area on the relevant supply-and-demand graph that represents government's tax revenue is

Correct AnswerverifiedShow Answer

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Producer s...
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The deadwe...
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Figure 8-11 -Refer to Figure 8-11.Suppose Q₁ = 4;Q₂ = 7;P₁ = $6;P₂ = $8;and P₃= $10.Then,when the tax is imposed,

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