Exam 8: Taxes

The demand for gasoline is inelastic and the supply of gasoline is elastic.Therefore,

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 and the producer surplus decrease.

In a labor market before any taxes are imposed,the equilibrium wage rate is $10.00 an hour and 10,000 people are employed.The government imposes a 20 percent income tax on workers' incomes.What is the wage rate that workers need to receive so that they can earn $10.00 per hour after the tax is paid? Suppose that after the tax is imposed,the wage rate rises to $12.00 an hour and that only 8,000 workers are employed.How is the tax incidence split between workers and firms?

The benefits principle of fair taxation means that people

Because the U.S.income tax is a progressive tax,taxing married couples as two single persons can violate

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

Consider the two principles of fair taxation,the benefits principle and the ability-to-pay principle,

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So,imposing a tax on the good results in a ________ in the price received and kept by sellers and a ________ in the price paid by buyers.

The deadweight loss of a tax

-In the labor market shown in the graph,the government introduces a 10 percent income tax.The employer pays ________ cents of the tax and the employee pays ________ cents of the tax.

The percentage of an additional dollar that is paid in tax is called

-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?

Suppose the government decides to tax salt.The demand for salt is inelastic and the supply is quite elastic.Who bears most of the tax incidence and pays most of this tax?

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

-The above figure shows the labor market for land surveyors.Dave is a land surveyor.The total tax paid by Dave's employer is equal to

The marriage tax problem in the United States is a

If the supply of capital is perfectly elastic,a tax on capital income results in

The supply of oil is more elastic than the demand for oil.If oil is taxed $10 per barrel,how will the tax be divided between the buyer and seller?

Which of the following taxes best illustrate the benefits principle of tax fairness?

The demand curve for pizza is downward sloping and the supply curve is upward sloping.If the government imposes a $2 tax on a pizza,________ the tax.