Question 1

Refer to the graph shown. An effective price floor at Pf causes producer surplus to:

Accepted Answer

A)  change from areas C + D + F to areas B + C + D. 
B)  change from areas A + B + E to areas A + B + C. 
C)  fall from areas C + D + F to area D. 
D)  fall from areas A + B + E to area A. 
A)  change from areas C + D + F to areas B + C + D. 
B)  change from areas A + B + E to areas A + B + C. 
C)  fall from areas C + D + F to area D. 
D)  fall from areas A + B + E to area A.

Question 2

"When small groups are helped by a government action and large groups are hurt by that same action, the small group tends to lobby far more effectively than the large group; thus, policies tend to reflect the small group's interest, not the interest of the large group." This statement is:

Accepted Answer

A)  evidence of the futility of lobbying. 
B)  the law of effective lobbying. 
C)  the large/small rule. 
D)  the general rule of political economy. 
A)  evidence of the futility of lobbying. 
B)  the law of effective lobbying. 
C)  the large/small rule. 
D)  the general rule of political economy.

Question 3

If the supply curve is perfectly elastic, the burden of a tax on suppliers is borne:

Accepted Answer

A)  entirely by the suppliers. 
B)  entirely by the consumers. 
C)  mostly by the suppliers and partly by the consumers if the demand curve is inelastic. 
D)  partly by the suppliers and mostly by the consumers if the demand curve is elastic. 
A)  entirely by the suppliers. 
B)  entirely by the consumers. 
C)  mostly by the suppliers and partly by the consumers if the demand curve is inelastic. 
D)  partly by the suppliers and mostly by the consumers if the demand curve is elastic.

Question 4

Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $10 and a quantity of 500 units. If the government imposes a $4 per-unit tax on this product, the equilibrium price will change to:

Accepted Answer

A)  $4. 
B)  $8. 
C)  $12. 
D)  $14. 
A)  $4. 
B)  $8. 
C)  $12. 
D)  $14.

Question 5

Refer to the following graph.   A $4 tax is levied on suppliers (represented by S0 without the tax). From the graph and tax structure you know that the:

Accepted Answer

A)  elasticities of supply and demand are about the same. 
B)  elasticity of supply is less than the elasticity of demand. 
C)  elasticity of demand is less than the elasticity of supply. 
D)  elasticities cannot be calculated. 
A)  elasticities of supply and demand are about the same. 
B)  elasticity of supply is less than the elasticity of demand. 
C)  elasticity of demand is less than the elasticity of supply. 
D)  elasticities cannot be calculated.

Question 6

Given the same supply elasticity, the burden of a 10 percent tax on suppliers would be greatest on consumers within what price range? $$\begin{array} { | c | c | } 
\hline \text { Price } & \text { Quantity } \
\hline \$ 2.00 & 26 \
\hline 4.00 & 22 \
\hline 6.00 & 18 \
\hline \mathbf { 8 . 0 0 } & 14 \
\hline 10.00 & 10 \
\hline
\end{array}$$

Accepted Answer

A)  $2 and $4. 
B)  $4 and $6 
C)  $6 and $8 
D)  $8 and $10 
A)  $2 and $4. 
B)  $4 and $6 
C)  $6 and $8 
D)  $8 and $10

Question 7

Refer to the graph shown. When the market is in equilibrium, total surplus is area:

Accepted Answer

A)  A plus area B. 
B)  E plus area F. 
C)  A plus area F. 
D)  A plus area F plus area E plus area D. 
A)  A plus area B. 
B)  E plus area F. 
C)  A plus area F. 
D)  A plus area F plus area E plus area D.

Question 8

The military draft can be seen as an implicit tax on potential recruits and a subsidy to those who demand defense services.

Accepted Answer

A) True 
 B)False

Question 9

If elasticity of demand is 0.7, elasticity of supply is 0.7, and a 5 percent excise tax is levied on the good:

Accepted Answer

A)  the tax burden on suppliers will be greater. 
B)  the tax burden on consumers will be greater. 
C)  the tax burden will be the same for both. 
D)  one cannot say who will bear the greater burden without knowing the tax. 
A)  the tax burden on suppliers will be greater. 
B)  the tax burden on consumers will be greater. 
C)  the tax burden will be the same for both. 
D)  one cannot say who will bear the greater burden without knowing the tax.

Refer to the graph shown. An effective price floor at P_f causes producer surplus to:

"When small groups are helped by a government action and large groups are hurt by that same action, the small group tends to lobby far more effectively than the large group; thus, policies tend to reflect the small group's interest, not the interest of the large group." This statement is:

If the supply curve is perfectly elastic, the burden of a tax on suppliers is borne:

Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $10 and a quantity of 500 units. If the government imposes a $4 per-unit tax on this product, the equilibrium price will change to:

Refer to the following graph. A $4 tax is levied on suppliers (represented by S₀ without the tax). From the graph and tax structure you know that the:

Given the same supply elasticity, the burden of a 10 percent tax on suppliers would be greatest on consumers within what price range? Price Quantity \ 2.00 26 4.00 22 6.00 18 14 10.00 10

Refer to the graph shown. When the market is in equilibrium, total surplus is area:

The military draft can be seen as an implicit tax on potential recruits and a subsidy to those who demand defense services.

If elasticity of demand is 0.7, elasticity of supply is 0.7, and a 5 percent excise tax is levied on the good:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Exam 7: Taxation and Government Intervention

Refer to the graph shown. An effective price floor at Pf causes producer surplus to:

"When small groups are helped by a government action and large groups are hurt by that same action, the small group tends to lobby far more effectively than the large group; thus, policies tend to reflect the small group's interest, not the interest of the large group." This statement is:

If the supply curve is perfectly elastic, the burden of a tax on suppliers is borne:

Refer to the graph shown. Assume that the market is initially in equilibrium at a price of $10 and a quantity of 500 units. If the government imposes a $4 per-unit tax on this product, the equilibrium price will change to:

Refer to the following graph. A $4 tax is levied on suppliers (represented by S0 without the tax). From the graph and tax structure you know that the:

Given the same supply elasticity, the burden of a 10 percent tax on suppliers would be greatest on consumers within what price range? Price Quantity \ 2.00 26 4.00 22 6.00 18 14 10.00 10

Refer to the graph shown. When the market is in equilibrium, total surplus is area:

The military draft can be seen as an implicit tax on potential recruits and a subsidy to those who demand defense services.

If elasticity of demand is 0.7, elasticity of supply is 0.7, and a 5 percent excise tax is levied on the good:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Filters

Refer to the graph shown. An effective price floor at P_f causes producer surplus to:

Refer to the following graph. A $4 tax is levied on suppliers (represented by S₀ without the tax). From the graph and tax structure you know that the: