21.RefertoFigure8-14.Whichofthefollowingcombinationswillmaximizethedeadweightlossfromatax? a.supply1anddemand1 b.supply2anddemand2 c.supply1anddemand2 d.supply2anddemand1 22.RefertoFigure8-14.Whichofthefollowingstatementsiscorrect? a.Supply1ismoreelasticthansupply2. b.Demand2ismoreelasticthandemand1. c.Demand1ismoreelasticthansupply1. d.Alloftheabovearecorrect. 23.RefertoFigure8-14.Whichofthefollowingstatementsisnotcorrect? a.Supply2ismoreelasticthansupply1. b.Demand2ismoreelasticthandemand1. c.Supply1ismoreinelasticthansupply2. d.Demand2ismoreinelasticthansupply2. 24.Supposethegovernmentimposesataxoncheese.Thedeadweightlossfromthistaxwilllikelybegreaterinthe a.firstyearafteritisimposedthanintheeighthyearafteritisimposedbecausedemandandsupplywillbemoreelasticinthefirstyearthanintheeighthyear. b.firstyearafteritisimposedthanintheeighthyearafteritisimposedbecausedemandandsupplywillbelesselasticinthefirstyearthanintheeighthyear. c.eighthyearafteritisimposedthaninthefirstyearafteritisimposedbecausedemandandsupplywillbemoreelasticinthefirstyearthanintheeighthyear. d.eighthyearafteritisimposedthaninthefirstyearafteritisimposedbecausedemandandsupplywillbelesselasticinthefirstyearthanintheeighthyear. 25.Thedemandforchickenwingsismoreelasticthanthedemandforrazorblades.Supposethegovernmentleviesanequivalenttaxonchickenwingsandrazorblades.Thedeadweightlosswouldbelargerinthemarketfor a.chickenwingsthaninthemarketforrazorbladesbecausethequantityofchickenwingswouldfallbymorethanthequantityofrazorblades. b.chickenwingsthaninthemarketforrazorbladesbecausethequantityofrazorbladeswouldfallbymorethanthequantityofchickenwings. c.razorbladesthaninthemarketforchickenwingsbecausethequantityofchickenwingswouldfallbymorethanthequantityofrazorblades. d.razorbladesthaninthemarketforchickenwingsbecausethequantityofrazorbladeswouldfallbymorethanthequantityofchickenwings. 26.Thedeadweightlossfromatax a.doesnotvaryinamountwhenthepriceelasticityofdemandchanges. b.doesnotvaryinamountwhentheamountofthetaxperunitchanges. c.islarger,thelargeristheamountofthetaxperunit. d.issmaller,thelargeristheamountofthetaxperunit. 27.Whichofthefollowingstatementsiscorrectregardingataxonagoodandtheresultingdeadweightloss? a.Thegreaterarethepriceelasticitiesofsupplyanddemand,thegreateristhedeadweightloss. b.Thegreateristhepriceelasticityofsupplyandthesmalleristhepriceelasticityofdemand,thegreateristhedeadweightloss. c.Thesmallerarethedecreasesinquantitydemandedandquantitysupplied,thegreaterthedeadweightloss. d.Thesmalleristhewedgebetweentheeffectivepricetosellersandtheeffectivepricetobuyers,thegreateristhedeadweightloss. 28.Theamountofdeadweightlossthatresultsfromataxofagivensizeisdeterminedby a.whetherthetaxisleviedonbuyersorsellers. b.thenumberofbuyersinthemarketrelativetothenumberofsellers. c.thepriceelasticitiesofdemandandsupply. d.theratioofthetaxperunittotheeffectivepricereceivedbysellers. 29.Theamountofdeadweightlossfromataxdependsuponthe a.priceelasticityofdemand. b.priceelasticityofsupply. c.amountofthetaxperunit. d.Alloftheabovearecorrect. 30.Assumethesupplycurvefordiapersisatypical,upward-slopingstraightline,andthedemandcurvefordiapersisatypical,downward-slopingstraightline.Supposetheequilibriumquantityinthemarketfordiapersis1,000permonthwhenthereisnotax.Thenataxof$0.50perdiaperisimposed.Theeffectivepricepaidbybuyersincreasesfrom a.Afterthetaxisimposed,theequilibriumquantityofdiapersis900permonth. b.Thedemandfordiapersismoreelasticthanthesupplyofdiapers. c.Thedeadweightlossofthetaxis$12.50. d.Thetaxcausesadecreaseinconsumersurplusof$380.