Question : 43) If buyers pay more of a tax than do : 1241641

 

43) If buyers pay more of a tax than do the sellers,

A) demand is more elastic than supply.

B) the amount of tax revenue collected by the government is almost zero.

C) supply is more elastic than demand.

D) the equilibrium price paid by buyers rises by less than half the amount of the tax.

E) None of the above answers is correct.

44) Cigarettes are highly addictive and therefore have a very low elasticity of demand. A $2.00 increase in the national sales tax on cigarettes would likely cause the price paid by buyers of cigarettes to

A) increase by more than $1.00 but less than $2.00.

B) increase by $2.00.

C) increase by more than $2.00.

D) increase by less than $1.00.

E) remain unchanged.

 

45) A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if

A) demand is perfectly inelastic.

B) demand is perfectly elastic.

C) demand is unit elastic.

D) demand is inelastic, but not perfectly inelastic.

E) demand is elastic, but not perfectly elastic.

 

46) If the supply of automobiles becomes more inelastic, then a tax on automobiles is

A) paid more by the buyers after the change than before.

B) paid more by the sellers after the change than before.

C) always split evenly between the buyers and the sellers.

D) paid more by the government after the change than before.

E) always paid entirely by the buyers.

47) For a given elasticity of demand, the less elastic the supply, the

A) larger the deadweight loss from a tax.

B) larger the share of a tax paid by the sellers.

C) greater the burden on the government from a tax.

D) greater is the excess burden from a tax.

E) larger the share of a tax paid by the buyers.

 

48) Sellers bear the entire incidence of a tax on a good. This outcome can occur if

A) supply is perfectly inelastic.

B) the good is an inferior good.

C) demand is perfectly inelastic.

D) the demand curve is downward sloping and the supply curve is upward sloping.

E) supply is perfectly elastic.

 

49) Why do sellers pay all of a tax when supply is perfectly inelastic?

A) because a perfectly inelastic supply means that the demand is elastic

B) because the government requires firms to collect the tax

C) because a perfectly inelastic supply means that the quantity supplied is quite sensitive to a change in price

D) because a perfectly inelastic supply means that suppliers will produce the same amount regardless of the price

E) because in this case the price of the good that suppliers receive and keep does not change

50) Suppose the elasticity of supply of land is 0 and elasticity of demand is 2. If the government imposes a 10 percent tax on land, then

A) buyers and sellers each pay 5 percent of the tax.

B) buyers pay all of the tax.

C) sellers pay all of the tax.

D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax.

E) buyers pay 1/2 of the tax.

 

51) The supply of sand is perfectly inelastic and the demand curve for sand is downward sloping. Hence, if a tax on sand is imposed,

A) sand buyers pay the entire tax.

B) sand sellers pay the entire tax.

C) the tax is split evenly between the buyers and sellers.

D) the government pays the entire tax.

E) the government collects no tax revenue because the supply is perfectly inelastic.

 

52) Suppose the supply of apartments in Minneapolis is perfectly elastic. The effect of a $100 per month tax on all apartments is that

A) landlords pay none of the tax and there is a surplus of apartments.

B) landlords pay all of the tax and suffer all of the deadweight loss.

C) landlords pay all of the tax and no changes take place in the quantity of apartments supplied.

D) renters pay all of the tax.

E) the government collects no tax revenue because the supply is perfectly elastic.

 

 

 

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