Question :
51) Suppose the elasticity of supply of land 0 and : 1226584
51) 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.
52) 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.
53) 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.
54) If the government eliminates a tax on a good with a perfectly elastic supply, who benefits most?
A) buyers
B) sellers
C) buyers if the demand is also perfectly elastic, otherwise sellers
D) buyers if the demand is unit elastic, otherwise sellers
E) Buyers and sellers benefit equally.
55) If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,
A) the buyer pays all the tax.
B) the seller pays all the tax.
C) the buyer pays 3/4 of the tax.
D) the seller pays 3/4 of the tax.
E) the buyer pays 4/3 of the tax.
56) The loss to society resulting from a tax includes the
A) deadweight loss.
B) consumer surplus paid to the government in the form of tax revenue.
C) producer surplus paid to the government in the form of tax revenue.
D) deadweight loss plus the consumer surplus and producer surplus paid to the government as tax revenue.
E) deadweight loss minus the tax revenue collected by the government.
57) The inefficiency of a sales tax on a good is ultimately the result of the
A) low tax revenue earned by the government relative to the cost of collection.
B) wedge between what buyers pay for the good and what sellers receive for the good.
C) buyers being unable to avoid paying the tax.
D) sellers being unable to avoid paying the tax.
E) increase in the consumer surplus that is more than offset by the decrease in the producer surplus.
58) A tax
A) places a wedge between the price paid by the buyers and the price received by the sellers.
B) reduces consumer surplus and producer surplus.
C) decreases government spending.
D) Both answers A and B are correct.
E) None of the above answers are correct.
59) When a tax is imposed on a good, at the after-tax equilibrium the marginal benefit of the last unit produced ________ the marginal cost.
A) equals
B) is greater than
C) is less than
D) can be calculated but is not comparable to
E) The premise of the question is incorrect because after a tax is imposed, it becomes impossible to determine the marginal benefit and the marginal cost.
60) When a tax is imposed on a good or a service, the marginal benefit of the last unit bought ________ the marginal cost of the last unit.
A) is equal to
B) is greater than
C) is less than
D) None of the above answers is correct because there is no consistent relationship between the marginal benefit of the last unit and its marginal cost.
E) is not able to be compared to
