FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Taxes

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 121

Multiple Choice

Review LaterAdd Note

Review Later

If an excise tax is imposed on automobiles and collected from consumers:

A) the demand curve will shift downward by the amount of the tax.
B) the supply curve will shift upward by the amount of the tax.
C) the equilibrium quantity supplied will increase relative to the pretax level.
D) the equilibrium quantity demanded will increase relative to the pretax level.

Correct Answer

verified

Show Answer

Question 122

Multiple Choice

Review LaterAdd Note

Review Later

The _____ tax rate on income represents the additional tax an individual pays if his or her income goes up by $1. This rate has _____ since 2000.

A) average; increased
B) marginal; decreased
C) marginal; increased
D) average; decreased

Correct Answer

verified

Show Answer

Question 123

Multiple Choice

Review LaterAdd Note

If demand and supply are both very elastic, a decrease in the rate of an excise tax will likely:

According to the _____ principle, those who use public services should bear the burden of the tax that pays for them.

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

Use the following to answer questions: Figure: The Market for Lattes -(Figure: The Market for Lattes) If an excise tax of $1.50 is assessed on each latte, government revenue will be:

_____ tax is NOT used in the United States.

_____ and _____ taxes are the largest sources of state and local government revenue.

The 1990 "yacht tax" caused a large deadweight loss because demand for luxury yachts made in the United States is:

The deadweight loss of an excise tax arises because the tax prevents some mutually beneficial transactions.

If the main purpose of a tax is to decrease the amount of a harmful activity, such as underage drinking, the government should impose it on harmful activities whose supply is _____ and demand is _____.

A regressive tax:

Use the following to answer questions: Figure: The Market for Blue Jeans -(Figure: The Market for Blue Jeans) Look at the 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 consumer and producer surplus after the tax was levied?

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.

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

Taxation according to the ability-to-pay principle is best illustrated in the United States by:

The price elasticity of demand for a particular cancer drug is zero and the price elasticity of supply is 0.50. If a $1 excise tax is levied on producers, how much of this tax will eventually be paid by consumers?

Use the following to answer question: Figure: Market for Hotel Rooms -(Figure: The Market for Hotel Rooms) Look at the figure The Market for Hotel Rooms. Suppose with no tax the equilibrium price is $110 and the equilibrium quantity is 250. If the local government levies a tax of $30 per night on each hotel room rented, the new equilibrium price will equal _____ and the new equilibrium quantity will equal _____.

The evidence suggests that taken collectively, taxes in the U.S. economy are:

Suppose an income tax is levied on none of the first $1,000, 10% of the next $9,000, and 20% of the remainder of earnings. How much tax would Miranda have to pay if she earned $20,000?