Question 1

Taxes drive a wedge between what buyers pay and sellers receive in a market.

Accepted Answer

A) True 
 B)False

Question 2

The price paid by buyers minus the price paid by sellers equals:

Accepted Answer

A)  the tax only if it is imposed on sellers. 
B)  the tax only if it is imposed on buyers. 
C)  the tax whether it is imposed on buyers or on sellers. 
D)  the subsidy whether it is given to buyers or to sellers. 
A)  the tax only if it is imposed on sellers. 
B)  the tax only if it is imposed on buyers. 
C)  the tax whether it is imposed on buyers or on sellers. 
D)  the subsidy whether it is given to buyers or to sellers.

Question 3

If a tax is imposed on buyers and prices do not instantaneously adjust, a surplus is created.

Accepted Answer

A) True 
 B)False

Question 4

If the District of Columbia decided to tax coffee at $1/cup what would happen to the price of a cup of coffee in Washington, D.C.?

Accepted Answer

A)  It would go down by nearly $1. 
B)  It would go down, but by less than $1. 
C)  It would go up, but by much less than $1. 
D)  It would go up by nearly $1. 
A)  It would go down by nearly $1. 
B)  It would go down, but by less than $1. 
C)  It would go up, but by much less than $1. 
D)  It would go up by nearly $1.

Question 5

If a tax is imposed on a market with elastic demand and inelastic supply:

Accepted Answer

A)  buyers will bear most of the burden of the tax. 
B)  sellers will bear most of the burden of the tax. 
C)  the burden of the tax will be shared equally between buyers and sellers. 
D)  neither the buyer nor the seller will bear the burden of the tax.. 
A)  buyers will bear most of the burden of the tax. 
B)  sellers will bear most of the burden of the tax. 
C)  the burden of the tax will be shared equally between buyers and sellers. 
D)  neither the buyer nor the seller will bear the burden of the tax..

Taxes drive a wedge between what buyers pay and sellers receive in a market.

The price paid by buyers minus the price paid by sellers equals:

If a tax is imposed on buyers and prices do not instantaneously adjust, a surplus is created.

If the District of Columbia decided to tax coffee at $1/cup what would happen to the price of a cup of coffee in Washington, D.C.?

If a tax is imposed on a market with elastic demand and inelastic supply:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Exam 6: Taxes and Subsidies

Taxes drive a wedge between what buyers pay and sellers receive in a market.

The price paid by buyers minus the price paid by sellers equals:

If a tax is imposed on buyers and prices do not instantaneously adjust, a surplus is created.

If the District of Columbia decided to tax coffee at $1/cup what would happen to the price of a cup of coffee in Washington, D.C.?

If a tax is imposed on a market with elastic demand and inelastic supply:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

The Price System

Price Ceilings and Floors

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters