Question : 31) The figure above shows the market for tires. According : 1239178

31) The figure above shows the market for tires. According to the figure, the government collects ________ per month in total tax revenue.

A) $600 million

B) $1,200 million

C) $2,000 million

D)  $900 million

E) None of the above answers is correct.

32) The figure above shows the market for tires. According to the figure, the price elasticity of demand is ________ the price elasticity of supply.

A) greater than

B) equal to

C) less than

D) not comparable to

E) More information is needed to determine if the price elasticity of demand is greater than, equal to, less than, or comparable to the price elasticity of supply.

33) For a given supply elasticity, the more inelastic the demand for a good, the larger the share of the tax paid by the

A) buyers.

B) sellers.

C) participants other than the buyers and sellers.

D) government.

E) None of the above answers is correct.

34) If a tax is placed on suppliers of a good, then the incidence of the tax

A) falls more on the sellers if demand is elastic.

B) falls more on the sellers if demand is inelastic.

C) is usually split equally between the buyers and the sellers.

D) usually falls more on the sellers than the buyers.

E) usually falls more on the buyers than the sellers.

35) Suppose that the elasticity of demand for insulin is 0.1, the elasticity of demand for oranges is 1.2, and the elasticity of supply for insulin and oranges is 0.4. If the government imposes a 10 percent tax on both insulin and oranges, the decrease in the quantity of oranges is ________ the decrease in the quantity of insulin.

A) larger than

B) smaller than

C) equals to

D) not comparable to

E) More information is needed to determine how the decrease in the quantity of oranges compares to the decrease in the quantity of insulin.

36) The demand for insulin is quite inelastic. The demand for Pepsi is quite elastic. Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi. If a $0.20 tax was imposed on each of these goods (holding everything else constant), which consumers would pay more of the tax?

A) the Pepsi consumers

B) the insulin consumers

C) There would be no difference in the amount of tax paid by the consumers.

D) More information is needed to determine which consumers pay more of the tax.

E) The premise of the question is wrong because the elasticity of demand and the incidence of a tax are not related.

37) The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,

A) sellers bear most of the incidence of a tax on gasoline.

B) buyers bear most of the incidence of a tax on gasoline.

C) the government bears most of the incidence of a tax on gasoline.

D) the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers.

E) None of the above answers is correct.

38) The buyers pay all of a tax when the demand is

A) perfectly elastic.

B) more elastic than the supply.

C) more inelastic than the supply.

D) unit elastic.

E) perfectly inelastic.

39) If the demand curve for a good is horizontal, a tax is levied on this product is

A) split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more.

B) split evenly between the buyers and the sellers.

C) paid entirely by buyers.

D) paid entirely by sellers.

E) not paid by either the buyers or the sellers.

40) Suppose the demand for specialty car license plates is perfectly inelastic and the supply curve for specialty license plates is upward sloping. A tax is imposed on specialty license plates. Which of the following is true?

A) Drivers pay the smallest share of the tax.

B) Drivers pay none of the tax.

C) Drivers pay all of the tax.

D) The government pays all of the tax.

E) The government collects nothing in tax revenues.