Question 1

When governments tax capital income, the equilibrium quantity of capital

Accepted Answer

A) increases because of the international mobility of capital. 
B) does not change because the supply of capital is perfectly elastic. 
C) decreases. 
D) does not change because the supply of capital is perfectly inelastic. 
E) might increase or decrease depending on whether the demand for capital is inelastic or elastic. 
A) increases because of the international mobility of capital. 
B) does not change because the supply of capital is perfectly elastic. 
C) decreases. 
D) does not change because the supply of capital is perfectly inelastic. 
E) might increase or decrease depending on whether the demand for capital is inelastic or elastic.

Question 2

Ali earns $20,000 and pays $2,000 in taxes; Maria earns $40,000 and pays $4,000 in taxes.Is this tax progressive, regressive, or proportional?

Accepted Answer

The tax is proportio

Question 3

The figure above shows the market for MP3 players, where S is the supply curve and D is the demand curve before any tax is imposed. The government imposes a $10 per unit tax on sellers of MP3 players.
-Based on the figure above, after the tax is imposed, the government collects tax revenue of ________ a week.

Accepted Answer

A) $20,000 
B) $10,000 
C) $50,000 
D) $60,000 
E) $40,000 
A) $20,000 
B) $10,000 
C) $50,000 
D) $60,000 
E) $40,000

Question 4

When a tax is imposed on a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself.Why doesn't the equilibrium price rise by the full amount of the tax?

Accepted Answer

Because firms collect taxes from consume

Question 5

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

Accepted Answer

A) $240. 
B) $320. 
C) $160. 
D) $120. 
E) $4. 
A) $240. 
B) $320. 
C) $160. 
D) $120. 
E) $4.

Question 6

-The table above gives the taxable income and the amount of tax paid.
a∙Is this income tax progressive, regressive, or proportional?
b∙If the taxable income is $25,000, what is the average tax rate?
c∙If taxable income increases from $25,000 to $30,000, what is the marginal tax rate?

Accepted Answer

a∙The income tax is progressiv

Question 7

The figure above shows the demand (D)and supply (S)curves for insulin before any tax is imposed. The government imposes a $0.20 a dose tax on sellers of insulin.
-After the tax is imposed, the price paid by the buyer is ________, and the price received (and kept)by the seller is ________.

Accepted Answer

A) $2.20; $2.00 
B) $2.00; $2.20 
C) $2.00; $2.00 
D) $2.20; $2.20 
E) $2.00; $1.80 
A) $2.20; $2.00 
B) $2.00; $2.20 
C) $2.00; $2.00 
D) $2.20; $2.20 
E) $2.00; $1.80

Question 8

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?

Accepted Answer

In order to receive a wage of $10.00 an

Question 9

Tax incidence is the

Accepted Answer

A) dollar amount of a tax, expressed as a percentage of the purchase price. 
B) dollar amount of a tax per unit sold. 
C) division of a tax burden between the buyer and seller. 
D) amount of revenue collected by government on a specific good. 
E) deadweight loss from the tax. 
A) dollar amount of a tax, expressed as a percentage of the purchase price. 
B) dollar amount of a tax per unit sold. 
C) division of a tax burden between the buyer and seller. 
D) amount of revenue collected by government on a specific good. 
E) deadweight loss from the tax.

Question 10

The average tax rate equals

Accepted Answer

A) (total tax ÷ change in income)× 100. 
B) (change in tax ÷ total income)× 100. 
C) (total tax ÷ total income)× 100. 
D) (change in tax ÷ change in income)× 100. 
E) (marginal tax are × total income)× 100. 
A) (total tax ÷ change in income)× 100. 
B) (change in tax ÷ total income)× 100. 
C) (total tax ÷ total income)× 100. 
D) (change in tax ÷ change in income)× 100. 
E) (marginal tax are × total income)× 100.

Question 11

A sales tax imposed on tires ________ consumer surplus and ________ producer surplus.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change 
A) increases; increases 
B) increases; decreases 
C) decreases; increases 
D) decreases; decreases 
E) does not change; does not change

Question 12

The tax ________ the price received by the seller by ________ per MP3 player.

Accepted Answer

A) raises; $5 
B) lowers; $5 
C) raises; $10 
D) lowers; $10 
E) lowers; $2.50 
A) raises; $5 
B) lowers; $5 
C) raises; $10 
D) lowers; $10 
E) lowers; $2.50

Question 13

-The figure above shows the labor supply and labor demand curves for personal trainers in the state of Florida.The initial equilibrium hourly wage is $10.Suppose the state of Florida institutes an income tax on labor income of $6 an hour in order to buy voting machines for the next election.The deadweight loss from this tax equals the region

Accepted Answer

A) abe. 
B) bce. 
C) cef. 
D) efg. 
E) cdf. 
A) abe. 
B) bce. 
C) cef. 
D) efg. 
E) cdf.

Question 14

Because the supply of land is perfectly inelastic, a tax on land income

Accepted Answer

A) is paid entirely by the suppliers. 
B) is paid entirely by the demanders. 
C) is shared equally between the suppliers and the demanders. 
D) is shared, but not equally, between the suppliers and the demanders. 
E) creates a deadweight loss. 
A) is paid entirely by the suppliers. 
B) is paid entirely by the demanders. 
C) is shared equally between the suppliers and the demanders. 
D) is shared, but not equally, between the suppliers and the demanders. 
E) creates a deadweight loss.

Question 15

-The above figure shows the labor market for land surveyors.Dave is a land surveyor.What is the total income tax Dave pays each year?

Accepted Answer

A) $1,500 
B) $4,500 
C) $3,000 
D) $40,500 
E) $45,000 
A) $1,500 
B) $4,500 
C) $3,000 
D) $40,500 
E) $45,000

Question 16

-The graph shows the market for cell phones.The government imposes a sales tax on cell phones at $10 a cell phone.The excess burden of the sales tax on cell phones is ________.

Accepted Answer

A) $20,000 
B) $15,000 
C) $35,000 
D) $7,500 
E) $30,000 
A) $20,000 
B) $15,000 
C) $35,000 
D) $7,500 
E) $30,000

Question 17

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

Accepted Answer

A) a deadweight loss and lenders pay all of the tax. 
B) a deadweight loss and borrowers (firms)pay all of the tax. 
C) no deadweight loss and borrowers (firms)and lenders split the tax. 
D) no deadweight loss and lenders pay all of the tax. 
E) no deadweight loss and borrowers (firms)pay all of the tax. 
A) a deadweight loss and lenders pay all of the tax. 
B) a deadweight loss and borrowers (firms)pay all of the tax. 
C) no deadweight loss and borrowers (firms)and lenders split the tax. 
D) no deadweight loss and lenders pay all of the tax. 
E) no deadweight loss and borrowers (firms)pay all of the tax.

Question 18

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

Accepted Answer

A) area B + area C. 
B) area B + area C + area E + area F. 
C) area E + area F. 
D) area D + area G. 
E) area A. 
A) area B + area C. 
B) area B + area C + area E + area F. 
C) area E + area F. 
D) area D + area G. 
E) area A.

Question 19

Is the deadweight loss from a sales tax on a product larger the more inelastic the demand for the good?

Accepted Answer

No, the deadweight l

Question 20

The average tax rate is the

Accepted Answer

A) percentage of an additional dollar of income paid in tax. 
B) percentage of income paid in tax. 
C) total amount of taxes paid by an individual. 
D) average of the rates at which income and taxes increase. 
E) same as the marginal tax rate for a progressive tax. 
A) percentage of an additional dollar of income paid in tax. 
B) percentage of income paid in tax. 
C) total amount of taxes paid by an individual. 
D) average of the rates at which income and taxes increase. 
E) same as the marginal tax rate for a progressive tax.

When governments tax capital income, the equilibrium quantity of capital

Ali earns $20,000 and pays $2,000 in taxes; Maria earns $40,000 and pays $4,000 in taxes.Is this tax progressive, regressive, or proportional?

When a tax is imposed on a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself.Why doesn't the equilibrium price rise by the full amount of the tax?

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

-The table above gives the taxable income and the amount of tax paid. a∙Is this income tax progressive, regressive, or proportional? b∙If the taxable income is $25,000, what is the average tax rate? c∙If taxable income increases from $25,000 to $30,000, what is the marginal tax rate?

The figure above shows the demand (D)and supply (S)curves for insulin before any tax is imposed. The government imposes a $0.20 a dose tax on sellers of insulin. -After the tax is imposed, the price paid by the buyer is , and the price received (and kept)by the seller is .

Tax incidence is the

The average tax rate equals

A sales tax imposed on tires consumer surplus and producer surplus.

The tax the price received by the seller by per MP3 player.

Because the supply of land is perfectly inelastic, a tax on land income

-The above figure shows the labor market for land surveyors.Dave is a land surveyor.What is the total income tax Dave pays each year?

-The graph shows the market for cell phones.The government imposes a sales tax on cell phones at $10 a cell phone.The excess burden of the sales tax on cell phones is ________.

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

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

Is the deadweight loss from a sales tax on a product larger the more inelastic the demand for the good?

The average tax rate is the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 8: Taxes

When governments tax capital income, the equilibrium quantity of capital

Ali earns $20,000 and pays $2,000 in taxes; Maria earns $40,000 and pays $4,000 in taxes.Is this tax progressive, regressive, or proportional?

When a tax is imposed on a good, the resulting rise in the equilibrium price is usually less than the amount of the tax itself.Why doesn't the equilibrium price rise by the full amount of the tax?

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

-The table above gives the taxable income and the amount of tax paid. a∙Is this income tax progressive, regressive, or proportional? b∙If the taxable income is $25,000, what is the average tax rate? c∙If taxable income increases from $25,000 to $30,000, what is the marginal tax rate?

The figure above shows the demand (D)and supply (S)curves for insulin before any tax is imposed. The government imposes a $0.20 a dose tax on sellers of insulin. -After the tax is imposed, the price paid by the buyer is ________, and the price received (and kept)by the seller is ________.

Tax incidence is the

The average tax rate equals

A sales tax imposed on tires ________ consumer surplus and ________ producer surplus.

The tax ________ the price received by the seller by ________ per MP3 player.

Because the supply of land is perfectly inelastic, a tax on land income

-The above figure shows the labor market for land surveyors.Dave is a land surveyor.What is the total income tax Dave pays each year?

-The graph shows the market for cell phones.The government imposes a sales tax on cell phones at $10 a cell phone.The excess burden of the sales tax on cell phones is ________.

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

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

Is the deadweight loss from a sales tax on a product larger the more inelastic the demand for the good?

The average tax rate is the

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

The figure above shows the demand (D)and supply (S)curves for insulin before any tax is imposed. The government imposes a $0.20 a dose tax on sellers of insulin. -After the tax is imposed, the price paid by the buyer is , and the price received (and kept)by the seller is .

A sales tax imposed on tires consumer surplus and producer surplus.

The tax the price received by the seller by per MP3 player.