Exam 8: Taxes

The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. -Based on the figure above,the tax ________ the price paid by the buyer by ________ per MP3 player.

Which of the following taxes best illustrates the ability to pay principle?

-The figure above shows the market for tires.The government has imposed a tax on tires,and the sellers pay ________ of the tax.

-The figure above shows the capital market. a.Before the government takes any action,what is the interest rate and quantity of capital? b.Suppose the government imposes a tax of 25 percent on the income from capital.After the tax,what is the equilibrium interest rate and quantity of capital? What is the after-tax interest rate? c.In the figure,darken the area that equals the deadweight loss from the tax.

The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax. The government imposes a $10 per unit tax on buyers of MP3 players. -Based on the figure above,the burden of the tax

What are the two conflicting principles of fairness that apply to a tax system? Briefly explain each.

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.

Which of the following is true? i.A tax on buyers has the same effect as the same sized tax on sellers. ii.The more elastic the demand,the larger is the share of the tax paid by the buyers. iii.The U.S.income tax is regressive.

Which of the following taxes best illustrate the ability-to-pay principle of tax fairness?

The demand curve for blue marker pens horizontal so the demand is perfectly ________.A tax of 50 cents lowers the price received by the seller by 50 cents and the seller pays ________ the tax.

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

Suppose the supply of apartments in Minneapolis is perfectly elastic.The effect of a $100 per month tax on all apartments is that

In 2010,Social Security taxes of over 11 percent were imposed on all income up to $104,000.For income that exceeded $104,000,no Social Security tax was imposed.Hence the Social Security tax is a

Giving in to the demand of protestors,suppose the French government reduces the tax on gasoline by 15 percent.Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic.As a result of the tax cut,the price for a gallon of gasoline paid by buyers

Neither the demand nor the supply of gasoline is perfectly elastic or inelastic.When the government increases the federal tax on gasoline,the effect on buyers is that the price they pay

Which of the following types of taxes generates the most revenue for governments in the United States?

A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if

-The graph shows the market for textbooks.If the government introduces a tax of $20 a textbook,then the price paid by buyers ________.

To levy a tax based on the benefits principle to pay for a bridge,the government

-In the figure above,suppose that the government imposes a tax of $4 per pizza.Then,the tax revenue collected by the government equals