Question : 61) When a product taxed, A) part of the initial consumer : 1239181

61) When a product is taxed,

A) part of the initial consumer surplus goes to the government as revenue.

B) part of the initial consumer surplus becomes a deadweight loss.

C) the producer surplus never changes because consumers pay taxes, not producers.

D) Both answers A and B are correct.

E) Both answers B and C are correct.

62) The size of the deadweight loss, or excess burden, of a tax depends on the

A) amount of producer surplus but not the amount of consumer surplus because it is the producers who send the tax revenues to the government.

B) strength of demand.

C) strength of supply.

D) elasticities of demand and supply.

E) number of demanders and the number of suppliers.

63) When a tax is imposed on a good or service, the

A) revenue gained by the government is the excess burden.

B) deadweight loss that arises from a tax is the excess burden.

C) share of the tax paid by the buyer is the excess burden.

D) share of the tax paid by the seller is the excess burden.

E) amount the government collects as tax revenue is the deadweight loss from the tax.

64) The excess burden of a tax refers to the fact that

A) the benefits from a tax exceed the tax revenue.

B) the deadweight loss from a tax exceeds the remaining consumer surplus.

C) marginal cost is greater than marginal benefit after the tax.

D) a tax creates a deadweight loss.

E) taxes are split between buyers and sellers.

65) The deadweight loss from a tax

A) is the tax revenue the government collects when people die.

B) is the split of a tax between the amount paid and the amount collected.

C) equals the amount collected as revenue from the tax.

D) is called the excess burden of the tax.

E) equals the amount collected as revenue from the tax plus the excess burden of the tax.

66) The deadweight loss of a tax

A) is the transfer of income from households to the government.

B) determines the incidence of a tax.

C) is part of the total burden of a tax.

D) is greater than the total burden of a tax.

E) equals the tax revenue collected by the government.

67) Suppose the elasticity of demand for Mexican food is 3.00 and the elasticity of supply is 1.20. If the government imposes a sales tax on Mexican food, which of the following occurs?

i.Less Mexican food is purchased by buyers.

ii.Less Mexican food is produced by sellers.

iii.The government receives the excess burden as revenue.

iv.Both the consumer surplus and the producer surplus decrease.

A) i and ii

B) iii only

C) i, ii, and iv

D) iv only

E) i, ii, iii, and iv

68) The above figure shows the demand curves in four different markets. If each of the markets has an identical upward sloping supply curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?

A) A

B) B

C) C

D) D

E) C and D

69) The above figure shows the demand curves in four different markets. If each of the markets has an identical upward sloping supply curve and the same tax is levied on suppliers, which market would produce the largest amount of deadweight loss?

A) A

B) B

C) C

D) D

E) C and D

70) The above figure shows the supply curves in four different markets. If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?

A) A

B) B

C) C

D) D

E) A and D