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Exam 7: Taxes

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Question 81

Multiple Choice

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(Figure: An Excise Tax) Use Figure: An Excise Tax.If an excise tax equal to $1.10 is imposed on this good,then the price paid by consumers will:

A) rise by $1.10.
B) rise by $1.33.
C) not rise.
D) rise by $0.50.

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Question 82

Multiple Choice

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Use the following to answer question: -(Figure: Tax Incidence) Use Figure: Tax Incidence.All other things unchanged,the effect of an excise tax on gasoline in the long run is most likely illustrated by panel _____,and the greater share of the burden of the excise tax (shown by the tax wedge in each panel) is borne by _____.

A) A;buyers
B) B;sellers
C) B;buyers
D) A;sellers

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Question 83

Multiple Choice

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A tax leads to a(n) _____ in consumer surplus and a(n) _____ in producer surplus.

A tax that rises less than in proportion to income is described as:

Recently,the government considered adding an excise tax on CDs that can be used to record music and CD players that can record discs.If this tax were enacted,the MOST likely effect would be:

Use the following to answer question: -(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed,the deadweight loss associated with the tax will be equal to (round all calculations to two decimal places) :

Use the following to answer question: -(Figure: The Market for Blue Jeans) Use Figure: The Market for Blue Jeans.The government recently levied a $10 tax on the producers of blue jeans.What area or areas in the graph identify the loss of producer surplus due to the tax?

Suppose price elasticity of demand is relatively inelastic for good X.If the price elasticity of supply for good X is elastic and an excise tax is imposed on good X,who will bear the greater burden of the tax?

To minimize deadweight loss,excise taxes should be levied on goods with inelastic demand and inelastic supply rather than goods with elastic demand and elastic supply.

Use the following to answer question: -(Scenario: The Market for Good X) Use Scenario: The Market for Good X.If a $1 per unit tax is imposed on this good,the new supply curve will be:

A tax of $10 on an income of $100,$25 on an income of $200,and $60 on an income of $300 is:

Use the following to answer question: -(Figure: The Market for SUVs) Use Figure: The Market for SUVs.A price _____ of _____ will bring the about the same price and output in the market for SUVs as would an excise tax of $60,000.

For a tax system to achieve equity,it must first achieve efficiency.

If a tax system is well designed:

Use the following to answer question: -(Figure: Income Tax Payments) Use Figure: Income Tax Payments.Which panel or panels BEST represent the effects of a proportional income tax?

If the marginal tax rate is higher than the average rate,the tax system is:

Brianna and Jess must pay an income tax.Both Brianna and Jess pay $1,000 in taxes each year,but Brianna earns $20,000 and Jess earns $10,000.From this information,you can infer that this tax is:

_____ taxes are paid on the purchase of most consumption goods.

Although employers and wage earners each pay 50% of the FICA tax,the tax reduces wages to the extent that the incidence of the tax falls almost entirely on workers.

A tax: