Question 1

Figure 8-13 
-Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

Accepted Answer

A)   $120.
B)   $80.
C)   $50.
D)   $25.E) B) and C)
F) A) and C)

Question 2

A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Accepted Answer

A)   downward by exactly $2.
B)   downward by less than $2.
C)   upward by exactly $2.
D)   upward by less than $2.E) A) and C)
F) None of the above

Question 3

Scenario 8-1
Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week.
-Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

Accepted Answer

A)   $80.
B)   $30.
C)   $20.
D)   $10.E) None of the above
F) All of the above

Question 4

Figure 8-7
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-7. As a result of the tax,

Accepted Answer

A)   consumer surplus decreases from $200 to $80.
B)   producer surplus decreases from $200 to $145.
C)   the market experiences a deadweight loss of $80.
D)   All of the above are correct.E) B) and D)
F) C) and D)

Question 5

Figure 8-13 
-Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

Accepted Answer

A)   $80.
B)   $40.
C)   $30.
D)   $10.E) A) and C)
F) A) and D)

Question 6

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 7

A deadweight loss is a consequence of a tax on a good because the tax

Accepted Answer

A)   induces the government to increase its expenditures.
B)   induces buyers to consume less, and sellers to produce less.
C)   increases the equilibrium price in the market.
D)   imposes a loss on buyers that is greater than the loss to sellers.E) B) and C)
F) A) and D)

Question 8

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, sellers effectively pay what amount of the $10 tax?

Accepted Answer

A)   $0
B)   $4
C)   $6
D)   $10E) B) and C)
F) None of the above

Question 9

Figure 8-1 
-Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

Accepted Answer

A)   consumer surplus after the tax.
B)   consumer surplus before the tax.
C)   producer surplus after the tax.
D)   producer surplus before the tax.E) B) and C)
F) B) and D)

Question 10

Which of the following statements is correct?

Accepted Answer

A)   A decrease in the size of a tax always decreases the tax revenue raised by that tax.
B)   A decrease in the size of a tax always decreases the deadweight loss of that tax.
C)   Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward- sloping part of the Laffer curve.
D)   An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve.E) C) and D)
F) None of the above

Question 11

Figure 8-25 
-Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Accepted Answer

Total tax ...

Question 12

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good. 
-Refer to Figure 8-8. One effect of the tax is to

Accepted Answer

A)   reduce consumer surplus by $108.
B)   reduce producer surplus by $72.
C)   create a deadweight loss of $60.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 13

Figure 8-26 
-Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

Accepted Answer

Total surplus is the sum of co...

Question 14

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Accepted Answer

A) True 
 B)False

Exam 8: Application: the Costs of Taxation

Figure 8-25 -Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Correct Answer
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Total tax ...
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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. As a result of the tax,

Correct Answer
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Figure 8-26 -Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

Correct Answer
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Total surplus is the sum of co...
View Answer

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Correct Answer
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A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Correct Answer
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Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

Correct Answer
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Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8. One effect of the tax is to

Correct Answer
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Scenario 8-1 Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week. -Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

Correct Answer
verified

Figure 8-1 -Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

Correct Answer
verified

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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A deadweight loss is a consequence of a tax on a good because the tax

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

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, sellers effectively pay what amount of the $10 tax?

Correct Answer
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Exam 8: Application: the Costs of Taxation

Figure 8-25 -Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Correct AnswerverifiedTotal tax ...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. As a result of the tax,

Correct AnswerverifiedShow Answer

Figure 8-26 -Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

Correct AnswerverifiedTotal surplus is the sum of co...View AnswerShow Answer

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Correct AnswerverifiedShow Answer

A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Correct AnswerverifiedShow Answer

Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

Correct AnswerverifiedShow Answer

Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8. One effect of the tax is to

Correct AnswerverifiedShow Answer

Scenario 8-1 Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week. -Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

Correct AnswerverifiedShow Answer

Figure 8-1 -Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

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

A deadweight loss is a consequence of a tax on a good because the tax

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Which of the following statements is correct?

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Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

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. When the tax is imposed in this market, sellers effectively pay what amount of the $10 tax?

Correct AnswerverifiedShow Answer

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Total tax ...
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Total surplus is the sum of co...
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