Question : 8.1   Taxes Buyers and Sellers 1) Tax incidence the A) burden : 1226554

8.1   Taxes on Buyers and Sellers

1) Tax incidence is the

A) burden buyers have to absorb from a tax on goods and services.

B) burden sellers have to absorb from a tax on goods and services.

C) lost revenue the government endures from goods and services that are not taxed.

D) division of the burden of a tax between the buyer and the seller.

E) deadweight loss created by a tax.

2) Tax incidence is the

A) dollar amount of a tax, expressed as a percentage of the purchase price.

B) dollar amount of a tax per unit sold.

C) division of a tax burden between the buyer and seller.

D) amount of revenue collected by government on a specific good.

E) deadweight loss from the tax.

3) The incidence of a tax refers to

A) the division of the burden of a tax between buyers and sellers.

B) the deadweight loss that a tax generates.

C) the inefficiency of a tax.

D) the revenue collected by government because of a tax.

E) the division of the burden of a tax between the public and the government.

4) If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is

A) split between buyers and sellers but not evenly.

B) paid fully by sellers.

C) paid fully by buyers.

D) split evenly between buyers and sellers.

E) perhaps split between buyers and sellers but it is impossible to determine the incidence without further information.

5) Sales taxes are usually collected from sellers, who view the tax as

A) resulting from a leftward of the demand curve.

B) an additional cost of selling the good.

C) an addition to the demand for the product.

D) an addition to profit.

E) the same as a rightward shift of the demand curve.

6) Imposing a sales tax on sellers of a product has an effect that is similar to which of the following?

A) a decrease in consumers’ preferences for the good

B) an increase in the costs of production

C) an increase in demand for the good

D) a decrease in people’s willingness to work

E) anything that decreases the demand and shifts the demand curve leftward2

7) A sales tax imposed on sellers of a good

A) decreases the demand and shifts the demand curve rightward.

B) decreases the supply and shifts the supply curve leftward.

C) decreases both the demand and the supply and shifts both the demand and supply curves leftward.

D) decreases the supply and shifts the supply curve rightward.

E) has no effect on either the demand or the supply.

8) Suppose the government imposes a $1 per gallon per gallon tax on sellers of gasoline. As a result, the

A) supply curve shifts leftward.

B) supply curve shifts rightward.

C) demand curve shifts leftward.

D) demand curve shifts rightward.

E) demand and supply curves both shift leftward.

9) If a good has a tax levied on it, sellers respond to the price that excludes the tax and not the price with the tax because

A) the tax is handed over to the state directly by buyers.

B) sellers do not get to keep the tax revenue.

C) the demand for the good has decreased.

D) the quantity supplied of the good increases.

E) demanders pay none of the tax.

10) The elasticity of demand for a good is 1 and the elasticity of supply is 0.8. Thus, imposing a tax on the good ________ the price kept by sellers and ________ the price paid by buyers.

A) raises; raises

B) raises; lowers

C) lowers; raises

D) lowers; lowers

E) does not change; raises