Question 1

In the market for widgets,the supply curve is the typical upward-sloping straight line,and the demand curve is the typical downward-sloping straight line.The equilibrium quantity in the market for widgets is 250 per month when there is no tax.Then a tax of $6 per widget is imposed.As a result,the government is able to raise $750 per month in tax revenue.We can conclude that the after-tax quantity of widgets is

Accepted Answer

A)  75 per month.
B)  100 per month.
C)  125 per month.
D)  150 per month.

Question 2

If a tax shifts the demand curve downward (or to the left) ,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.

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.

Question 4

Figure 8-9
The vertical distance between points A and C represents a tax in the market. 
-Refer to Figure 8-9.The consumer surplus without the tax is

Accepted Answer

A)  $2,000.
B)  $5,000.
C)  $8,000.
D)  $16,000.

Question 5

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.

Question 6

The benefit to buyers of participating in a market is measured by

Accepted Answer

A)  consumer surplus.
B)  producer surplus.
C)  total surplus.
D)  deadweight loss.

Question 7

Figure 8-4
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-4.The tax results in a loss of consumer surplus that amounts to

Accepted Answer

A)  $105.
B)  $140.
C)  $170.
D)  $210.

Question 8

To measure the gains and losses from a tax on a good,economists use the tools of

Accepted Answer

A)  macroeconomics.
B)  welfare economics.
C)  international-trade theory.
D)  circular-flow analysis.

Question 9

A tax of $0.25 is imposed on each bag of potato chips that is sold.The tax decreases producer surplus by $600 per day,generates tax revenue of $1,220 per day,and decreases the equilibrium quantity of potato chips by 120 bags per day.The tax

Accepted Answer

A)  decreases consumer surplus by $645 per day.
B)  decreases the equilibrium quantity from 6,000 bags per day to 5,880 bags per day.
C)  decreases total surplus from $3,000 to $1,800 per day.
D)  creates a deadweight loss of $15 per day.

Question 10

Figure 8-3
The vertical distance between points A and C represents a tax in the market. 
-Refer to Figure 8-3.The amount of deadweight loss associated with the tax is equal to

Accepted Answer

A)  P3ACP1.
B)  ABC.
C)  P2ADP3.
D)  P1DCP2.

Question 11

Figure 8-12 
-Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The tax causes the price received by sellers to

Accepted Answer

A)  decrease by $3.
B)  increase by $2.
C)  decrease by $1.
D)  increase by $6.

Question 12

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.With the tax,the consumer surplus is

Accepted Answer

A)  (P0-P2) x Q2.
B)  1/2 x (P0-P2) x Q2.
C)  (P0-P5) x Q5.
D)  1/2 x (P0-P5) x Q5.

Question 13

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good. 
-Refer to Figure 8-8.The tax causes producer surplus to decrease by the area

Accepted Answer

A)  D+F.
B)  D+F+G.
C)  D+F+J.
D)  D+F+G+H.

Question 14

Figure 8-1 
-Refer to Figure 8-1.Suppose the government imposes a tax of P' - P'''.The area measured by J 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.

Question 15

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.

Question 16

The supply curve for motor oil is the typical upward-sloping straight line,and the demand curve for motor oil is the typical downward-sloping straight line.When motor oil is taxed,the area on the relevant supply-and-demand graph that represents the deadweight loss is

Accepted Answer

A)  larger than the area that represents consumer surplus in the absence of the tax.
B)  larger than the area that represents government's tax revenue.
C)  a triangle.
D)  All of the above are correct.

Question 17

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good. 
-Refer to Figure 8-8.The government collects tax revenue that is the area

Accepted Answer

A)  L.
B)  B+D.
C)  C+F.
D)  F+G+L.

Question 18

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,the price buyers effectively pay is

Accepted Answer

A)  $4.
B)  $6.
C)  $10.
D)  $16.

Question 19

Figure 8-2
The vertical distance between points A and B represents a tax in the market. 
-Refer to Figure 8-2.The loss of consumer surplus as a result of the tax is

Accepted Answer

A)  $1.50.
B)  $3.
C)  $4.50.
D)  $6.

Question 20

Suppose a tax of $3 is imposed on each new garden hose that is sold,resulting in a deadweight loss of $22,500.The supply curve is a typical upward-sloping straight line,and the demand curve is a typical downward-sloping straight line.Before the tax was imposed,the equilibrium quantity of garden hoses was 100,000.We can conclude that the equilibrium quantity of garden hoses after the tax is imposed is

Accepted Answer

A)  75,000.
B)  85,000.
C)  90,000.
D)  95,000.

Exam 8: Application the Cost of Taxation: The Deadweight Loss of Taxation

Figure 8-9 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-9.The consumer surplus without the tax is

Correct Answer
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Figure 8-12 -Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The tax causes the price received by sellers to

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

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
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Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8.The government collects tax revenue that is 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.When the tax is imposed in this market,producer surplus is

Correct Answer
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The supply curve for motor oil is the typical upward-sloping straight line,and the demand curve for motor oil is the typical downward-sloping straight line.When motor oil is taxed,the area on the relevant supply-and-demand graph that represents the deadweight loss is

Correct Answer
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The benefit to buyers of participating in a market is measured by

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 8-10 -Refer to Figure 8-10.Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2.With the tax,the consumer surplus 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.The tax causes producer surplus to decrease 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.When the tax is imposed in this market,the price buyers effectively pay is

Correct Answer
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To measure the gains and losses from a tax on a good,economists use the tools of

Correct Answer
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A tax of $0.25 is imposed on each bag of potato chips that is sold.The tax decreases producer surplus by $600 per day,generates tax revenue of $1,220 per day,and decreases the equilibrium quantity of potato chips by 120 bags per day.The tax

Correct Answer
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Figure 8-2 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-2.The loss of consumer surplus as a result of the tax is

Correct Answer
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Figure 8-3 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-3.The amount of deadweight loss associated with the tax is equal to

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 tax results in a loss of consumer surplus that amounts to

Correct Answer
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Figure 8-1 -Refer to Figure 8-1.Suppose the government imposes a tax of P' - P'''.The area measured by J represents

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Exam 8: Application the Cost of Taxation: The Deadweight Loss of Taxation

Figure 8-9 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-9.The consumer surplus without the tax is

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Figure 8-12 -Refer to Figure 8-12.Suppose a $3 per-unit tax is placed on this good.The tax causes the price received by sellers to

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

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 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8.The government collects tax revenue that is 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.When the tax is imposed in this market,producer surplus is

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The supply curve for motor oil is the typical upward-sloping straight line,and the demand curve for motor oil is the typical downward-sloping straight line.When motor oil is taxed,the area on the relevant supply-and-demand graph that represents the deadweight loss is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The benefit to buyers of participating in a market is measured by

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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

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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.With the tax,the consumer surplus is

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Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8.The tax causes producer surplus to decrease by the area

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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,the price buyers effectively pay is

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To measure the gains and losses from a tax on a good,economists use the tools of

Correct AnswerverifiedShow Answer

A tax of $0.25 is imposed on each bag of potato chips that is sold.The tax decreases producer surplus by $600 per day,generates tax revenue of $1,220 per day,and decreases the equilibrium quantity of potato chips by 120 bags per day.The tax

Correct AnswerverifiedShow Answer

Figure 8-2 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-2.The loss of consumer surplus as a result of the tax is

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Figure 8-3 The vertical distance between points A and C represents a tax in the market. -Refer to Figure 8-3.The amount of deadweight loss associated with the tax is equal to

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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 tax results in a loss of consumer surplus that amounts to

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

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