Question : 73) If a $1 sales tax imposed the sale of : 1241644

 

73) If a $1 sales tax is imposed on the sale of a CD, and neither the demand nor the supply is perfectly elastic or perfectly inelastic, then the price of a CD paid by consumers will

A) increase by $1 and fewer CDs will be bought.

B) increase by less than $1 and fewer CDs will be bought.

C) not change and the same number of CDs will be bought.

D) increase by $1 and the same number of CDs will be bought.

E) increase by more than $1 and fewer CDs will be bought.

74) Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity.

A) rise; an increase

B) rise; a decrease

C) fall; an increase

D) fall; a decrease

E) a rise; no change

 

75) The graph shows the market for textbooks. If the government introduces a tax of $20 a textbook, then the price paid by buyers ________.

A) increases by $20

B) increases to $80 a textbook

C) decreases to $60 a textbook

D) is $70 a textbook

E) does not change because the demand for textbooks is perfectly elastic

76) Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in a ________ in the price received and kept by sellers and a ________ in the price paid by buyers.

A) rise; rise

B) rise; fall

C) fall; rise

D) fall; fall

E) no change; rise

 

77) Suppose the demand for barley is perfectly elastic. The supply curve of barley is upward sloping. If a tax is imposed on barley,

A) barley sellers pay the entire tax.

B) barley buyers pay the entire tax.

C) the government pays the entire tax.

D) the tax is split evenly between barley buyers and sellers.

E) who pays the tax depends on whether the government imposes the tax on barley sellers or on barley buyers.

78) The demand for apple pies is perfectly elastic. If the government taxes apple pies at $1 a pie, then ________.

A) the seller pays the entire tax

B) the buyer pays the entire tax

C) the seller and the buyer split the tax evenly

D) the seller and the buyer split the tax but the seller pays more

E) who pays the tax depends on whether the government imposes the tax on pie buyers or on pie sellers

79) At harvest time the supply of wheat is perfectly inelastic. If the government taxes wheat at $1 a bushel, then

A) the seller pays the entire tax.

B) the buyer pays the entire tax.

C) the seller and the buyer split the tax evenly.

D) the seller and the buyer split the tax but the seller pays more.

E) no one pays the tax because the wheat must be harvested or it will go to waste.

 

80) To determine who bears the greater share of a tax, we compare the

A) number of buyers to the number of sellers.

B) elasticity of supply to the elasticity of demand.

C) size of the tax to the price of the good.

D) government tax revenue to the revenue collected by the suppliers.

E) pre-tax quantity to the post-tax quantity.

81) The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyer and seller?

A) The seller will pay more of the tax than the buyer pays.

B) The buyer will pay more of the tax than the seller pays.

C) The seller and buyer will split the tax evenly.

D) The seller will pay the entire tax.

E) The buyer will pay the entire tax.

 

82) The buyer will pay the entire tax levied on a good when the demand for the good is ________ or when the supply of the good is ________.

A) perfectly elastic; perfectly inelastic

B) perfectly elastic; perfectly elastic

C) perfectly inelastic; perfectly inelastic

D) perfectly inelastic; perfectly elastic

E) unit elastic; unit elastic

 

 

83) A sales tax imposed on tires ________ consumer surplus and ________ producer surplus.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) does not change; does not change

84) If a tax is placed on tires, then

i.the equilibrium quantity of tires will decrease.

ii.a deadweight loss will be created.

iii.the producer surplus will decrease.

A) i only

B) ii only

C) i and iii

D) i and ii

E) i, ii, and iii

 

85) The deadweight loss from a tax is called the

A) marginal benefit of the tax.

B) marginal cost of the tax.

C) excess burden of the tax.

D) net gain from taxation.

E) net loss from taxation.

86) The graph shows the market for cell phones. The government imposes a sales tax on cell phones at $10 a cell phone. The excess burden of the sales tax on cell phones is ________.

A) $20,000

B) $15,000

C) $35,000

D) $7,500

E) $30,000

 

87) A sales tax creates a deadweight loss because

A) there is some paper work opportunity cost of sellers paying the sales tax.

B) demand and supply both decrease.

C) less is produced and consumed.

D) citizens value government goods less than private goods.

E) the government spends the tax revenue it collects.