Question : 91) The “economic incidence” of an excise tax illustrates A) who : 1384163

91) The “economic incidence” of an excise tax illustrates

A) who is legally responsible for paying it to the government.

B) the legislative process through which it must be passed.

C) the economic costs associated with avoiding the tax.

D) who bears the burden of the tax.

E) the political process for implementing a tax.

92) Suppose a market is in equilibrium at price P0, and then an excise tax of t dollars per unit of the good is imposed. At a price of (P0 + t) there will be excess ________ for the good unless the demand curve is ________.

A) supply; horizontal

B) supply; vertical

C) demand; horizontal

D) demand; vertical

E) tax; unit elastic

93) Suppose the market supply curve for some good is upward sloping. If the imposition of an excise tax causes no change in the equilibrium quantity sold in the market, the good’s demand curve must be ________, meaning that the burden of the tax has fallen completely on the ________.

A) vertical; firms

B) vertical; consumers

C) horizontal; firms

D) horizontal; consumers

E) unit elastic; government

94) Producers will bear a larger burden of a sales tax if

A) demand is relatively elastic and supply is relatively inelastic.

B) demand is relatively inelastic and supply is relatively elastic.

C) both demand and supply are relatively inelastic.

D) both demand and supply are relatively elastic.

E) the tax is collected by firms rather than remitted directly to the government by consumers.

95) Consider an excise tax imposed on daily parking charges in the downtown of a small city. Before the imposition of the tax, equilibrium price and quantity are $15 and 100 cars parked. (P = $15, Q = 100). The city government imposes a tax of $3 per car parked per day. Market equilibrium adjusts to P = $16 and Q = 95. How much tax revenue does the city government collect per day?

A) $95

B) $100

C) $285

D) $300

E) $1710

96) Consider an excise tax imposed on daily parking charges in the downtown of a small city. Before the imposition of the tax, equilibrium price and quantity are $15 and 100 cars parked. (P = $15, Q = 100). The city government imposes a tax of $3 per car parked per day. Market equilbirium adjusts to P = $16 and Q = 95. After imposition of the tax, what is the daily after-tax price received by the seller per car parked?

A) $1

B) $3

C) $13

D) $15

E) $16

97) Consider an excise tax imposed on daily parking charges in the downtown of a small city. Before the imposition of the tax, equilibrium price and quantity are $15 and 100 cars parked. (P = $15, Q = 100). The city government imposes a tax of $3 per car parked per day. Market equilibrium adjusts to P = $16 and Q = 95. What is the total after-tax revenue received per day by the seller after imposition of the tax?

A) $1235

B) $1600

C) $1500

D) $1520

E) $1425

98) Consider an excise tax imposed on daily parking charges in the downtown of a small city. Before the imposition of the tax, equilibrium price and quantity are $15 and 100 cars parked. (P = $15, Q = 100). The city government imposes a tax of $3 per car parked per day. Market equilibrium adjusts to P = $16 and Q = 95. Which of the following statements about the burden of the tax is correct?

A) Supply is less elastic relative to demand and therefore more of the burden falls on the consumer.

B) Supply is more elastic relative to demand and therefore more of the burden falls on the seller.

C) Supply is more elastic relative to demand and therefore more of the burden falls on the consumer.

D) Supply is less elastic relative to demand and therefore more of the burden falls on the seller.

99) Consider an excise tax imposed on daily parking charges in the downtown of a small city. Before the imposition of the tax, equilibrium price and quantity are $15 and 100 cars parked. (P = $15, Q = 100). The city government imposes a tax of $3 per car parked per day. Market equilibrium adjusts to P = $18 and Q = 100. Which of the following statements about the burden of the tax is correct?

A) Price elasticity of supply is 0 and therefore the entire burden of the tax falls on the consumer.

B) Elasticity of demand is 0 and therefore the entire burden of the tax falls on the consumer.

C) Elasticity of supply is 1 and therefore the entire burden of the tax falls on the seller.

D) Price elasticity of demand is 1 and therefore the entire burden of the tax falls on the seller

E) The burden of the tax is shared equally by the seller and the consumer.

100) Refer to Figure 4-4. Suppose the government imposes a tax of $0.60 per soft drink purchased. The price paid by the consumer becomes

A) $1.80

B) $2.00

C) $2.20

D) $2.40

E) $2.60