Question 1

Figure 8-9
The vertical distance between points A and C represent a tax in the market. 
-Refer to Figure 8-9.The imposition of the tax causes the price paid by buyers to increase by

Accepted Answer

A)   $20.
B)   $200.
C)   $300.
D)   $500.E) A) and B)
F) C) and D)

Question 2

Figure 8-6
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-6.When the tax is imposed in this market,producer surplus is

Accepted Answer

A)   $450.
B)   $600.
C)   $900.
D)   $1,500.E) A) and B)
F) None of the above

Question 3

A tax

Accepted Answer

A)   lowers the price buyers pay and raises the price sellers receive.
B)   raises the price buyers pay and lowers the price sellers receive.
C)   places a wedge between the price buyers pay and the price sellers receive.
D)   Both b and c are correct.E) A) and B)
F) A) and C)

Question 4

Figure 8-3
The vertical distance between points A and C represents a tax in the market. 
-Refer to Figure 8-3.The loss in producer surplus caused by the tax is measured by the area

Accepted Answer

A)   ABC.
B)   P1P3ABC.
C)   P1P2BC.
D)   P1C0.E) All of the above
F) B) and C)

Question 5

When a tax is placed on a product,the price paid by buyers

Accepted Answer

A)   rises,and the price received by sellers rises.
B)   rises,and the price received by sellers falls.
C)   falls,and the price received by sellers rises.
D)   falls,and the price received by sellers falls.E) A) and C)
F) B) and C)

Question 6

Figure 8-6
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-6.Without a tax,producer surplus in this market is

Accepted Answer

A)   $1,500.
B)   $2,400.
C)   $3,000.
D)   $3,600.E) B) and C)
F) None of the above

Question 7

Figure 8-3 
-Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is producer surplus after the tax is imposed?

Accepted Answer

Producer s...

Question 8

In a recent research paper published by the European Central Bank,two economists concluded that U.S.tax revenues would

Accepted Answer

A)   increase if labor taxes were increased or if capital income taxes were increased.
B)   increase if labor taxes were increased,but tax revenues would decrease if capital income taxes were increased.
C)   decrease if labor taxes were increased,but tax revenues would increase if capital income taxes were increased.
D)   decrease if labor taxes were increased or if capital income taxes were increased.E) A) and B)
F) A) and C)

Question 9

Figure 8-1 
-Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The per-unit burden of the tax on sellers is

Accepted Answer

A)   $1.
B)   $2.
C)   $3.
D)   $4.E) A) and D)
F) A) and B)

Question 10

Assume the supply curve for cigars is a typical,upward-sloping straight line,and the demand curve for cigars is a typical,downward-sloping straight line.Suppose the equilibrium quantity in the market for cigars is 1,000 per month when there is no tax.Then a tax of $0.50 per cigar is imposed.The effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40.The government's tax revenue amounts to $475 per month.Which of the following statements is correct?

Accepted Answer

A)   After the tax is imposed,the equilibrium quantity of cigars is 900 per month.
B)   The demand for cigars is more elastic than the supply of cigars.
C)   The deadweight loss of the tax is $12.50.
D)   The tax causes a decrease in consumer surplus of $380.E) All of the above
F) B) and C)

Question 11

When the government imposes taxes on buyers and sellers of a good,society loses some of the benefits of market efficiency.

Accepted Answer

A) True 
 B)False

Question 12

The less freedom people are given to choose the date of their retirement,the

Accepted Answer

A)   more elastic is the supply of labor.
B)   less elastic is the supply of labor.
C)   flatter is the labor supply curve.
D)   smaller is the decrease in employment that will result from a tax on labor.E) All of the above
F) None of the above

Question 13

Economists dismiss the idea that lower tax rates can lead to higher tax revenue,because there is a consensus that the relevant elasticities of demand and supply are very low.

Accepted Answer

A) True 
 B)False

Exam 8: Application: The Costs of Taxation

Figure 8-3 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-3.The loss in producer surplus caused by the tax is measured by the area

Correct Answer
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Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6.Without a tax,producer surplus in this market is

Correct Answer
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The less freedom people are given to choose the date of their retirement,the

Correct Answer
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A tax

Correct Answer
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When a tax is placed on a product,the price paid by buyers

Correct Answer
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Figure 8-3 -Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is producer surplus after the tax is imposed?

Correct Answer
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Producer s...
View Answer

When the government imposes taxes on buyers and sellers of a good,society loses some of the benefits of market efficiency.

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 imposition of the tax causes the price paid by buyers to increase by

Correct Answer
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Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6.When the tax is imposed in this market,producer surplus is

Correct Answer
verified

In a recent research paper published by the European Central Bank,two economists concluded that U.S.tax revenues would

Correct Answer
verified

Figure 8-1 -Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The per-unit burden of the tax on sellers is

Correct Answer
verified

Economists dismiss the idea that lower tax rates can lead to higher tax revenue,because there is a consensus that the relevant elasticities of demand and supply are very low.

Correct Answer
verified

Exam 8: Application: The Costs of Taxation

Figure 8-3 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-3.The loss in producer surplus caused by the tax is measured by the area

Correct AnswerverifiedShow Answer

Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6.Without a tax,producer surplus in this market is

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The less freedom people are given to choose the date of their retirement,the

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A tax

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When a tax is placed on a product,the price paid by buyers

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Figure 8-3 -Refer to Figure 8-3.Suppose the government places a $4 tax per unit on this good.How much is producer surplus after the tax is imposed?

Correct AnswerverifiedProducer s...View AnswerShow Answer

When the government imposes taxes on buyers and sellers of a good,society loses some of the benefits of market efficiency.

Correct AnswerverifiedShow 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 imposition of the tax causes the price paid by buyers to increase by

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Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6.When the tax is imposed in this market,producer surplus is

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In a recent research paper published by the European Central Bank,two economists concluded that U.S.tax revenues would

Correct AnswerverifiedShow Answer

Figure 8-1 -Refer to Figure 8-1.Suppose a $3 per-unit tax is placed on this good.The per-unit burden of the tax on sellers is

Correct AnswerverifiedShow Answer

Economists dismiss the idea that lower tax rates can lead to higher tax revenue,because there is a consensus that the relevant elasticities of demand and supply are very low.

Correct AnswerverifiedShow Answer

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Producer s...
View Answer

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