Question 1

Figure 8-13  
-Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

Accepted Answer

A)  $80. 
B)  $40. 
C)  $30. 
D)  $10. 
A)  $80. 
B)  $40. 
C)  $30. 
D)  $10.

Question 2

A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Accepted Answer

A)  downward by exactly $2. 
B)  downward by less than $2. 
C)  upward by exactly $2. 
D)  upward by less than $2. 
A)  downward by exactly $2. 
B)  downward by less than $2. 
C)  upward by exactly $2. 
D)  upward by less than $2.

Question 3

Figure 8-26  
-Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

Accepted Answer

Total surplus is the sum of co

Question 4

A deadweight loss is a consequence of a tax on a good because the tax

Accepted Answer

A)  induces the government to increase its expenditures. 
B)  induces buyers to consume less, and sellers to produce less. 
C)  increases the equilibrium price in the market. 
D)  imposes a loss on buyers that is greater than the loss to sellers. 
A)  induces the government to increase its expenditures. 
B)  induces buyers to consume less, and sellers to produce less. 
C)  increases the equilibrium price in the market. 
D)  imposes a loss on buyers that is greater than the loss to sellers.

Question 5

Scenario 8-1
Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week.
-Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

Accepted Answer

A)  $80. 
B)  $30. 
C)  $20. 
D)  $10. 
A)  $80. 
B)  $30. 
C)  $20. 
D)  $10.

Question 6

When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.

Accepted Answer

A) True 
 B)False

Question 7

Figure 8-1  
-Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

Accepted Answer

A)  consumer surplus after the tax. 
B)  consumer surplus before the tax. 
C)  producer surplus after the tax. 
D)  producer surplus before the tax. 
A)  consumer surplus after the tax. 
B)  consumer surplus before the tax. 
C)  producer surplus after the tax. 
D)  producer surplus before the tax.

Question 8

Figure 8-13  
-Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

Accepted Answer

A)  $120. 
B)  $80. 
C)  $50. 
D)  $25. 
A)  $120. 
B)  $80. 
C)  $50. 
D)  $25.

Question 9

Figure 8-25  
-Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Accepted Answer

Total tax

Question 10

Figure 8-8
Suppose the government imposes a $10 per unit tax on a good.  
-Refer to Figure 8-8. One effect of the tax is to

Accepted Answer

A)  reduce consumer surplus by $108. 
B)  reduce producer surplus by $72. 
C)  create a deadweight loss of $60. 
D)  All of the above are correct. 
A)  reduce consumer surplus by $108. 
B)  reduce producer surplus by $72. 
C)  create a deadweight loss of $60. 
D)  All of the above are correct.

Question 11

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Accepted Answer

A) True 
 B)False

Question 12

Figure 8-6
The vertical distance between points A and B represents a tax in the market.  
-Refer to Figure 8-6. When the tax is imposed in this market, sellers effectively pay what amount of the $10 tax?

Accepted Answer

A)  $0 
B)  $4 
C)  $6 
D)  $10 
A)  $0 
B)  $4 
C)  $6 
D)  $10

Question 13

Which of the following statements is correct?

Accepted Answer

A)  A decrease in the size of a tax always decreases the tax revenue raised by that tax. 
B)  A decrease in the size of a tax always decreases the deadweight loss of that tax. 
C)  Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward- sloping part of the Laffer curve. 
D)  An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve. 
A)  A decrease in the size of a tax always decreases the tax revenue raised by that tax. 
B)  A decrease in the size of a tax always decreases the deadweight loss of that tax. 
C)  Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward- sloping part of the Laffer curve. 
D)  An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve.

Question 14

Figure 8-7
The vertical distance between points A and B represents a tax in the market.  
-Refer to Figure 8-7. As a result of the tax,

Accepted Answer

A)  consumer surplus decreases from $200 to $80. 
B)  producer surplus decreases from $200 to $145. 
C)  the market experiences a deadweight loss of $80. 
D)  All of the above are correct. 
A)  consumer surplus decreases from $200 to $80. 
B)  producer surplus decreases from $200 to $145. 
C)  the market experiences a deadweight loss of $80. 
D)  All of the above are correct.

Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Figure 8-26 -Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

A deadweight loss is a consequence of a tax on a good because the tax

Scenario 8-1 Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week. -Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.

Figure 8-1 -Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

Figure 8-25 -Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8. One effect of the tax is to

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6. When the tax is imposed in this market, sellers effectively pay what amount of the $10 tax?

Which of the following statements is correct?

Figure 8-7 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-7. As a result of the tax,

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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Exam 8: Application: the Costs of Taxation

Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The consumer surplus after this tax is

A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

Figure 8-26 -Refer to Figure 8-26. Suppose the government places a $3 tax per unit on this good. How much is total surplus after the tax is imposed?

A deadweight loss is a consequence of a tax on a good because the tax

Scenario 8-1 Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week. -Refer to Scenario 8-1. If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is

When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.

Figure 8-1 -Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by L+M+Y represents

Figure 8-13 -Refer to Figure 8-13. Suppose the government places a $5 per-unit tax on this good. The amount of deadweight loss resulting from this tax is

Figure 8-25 -Refer to Figure 8-25. Suppose the government increases the size of the tax on this good from $4 per unit to $6 per unit. Will the tax revenue collected from the tax increase, decrease, or stay the same?

Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. -Refer to Figure 8-8. One effect of the tax is to

The Social Security tax, and to a large extent, the federal income tax, are labor taxes.

Figure 8-6 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-6. When the tax is imposed in this market, sellers effectively pay what amount of the $10 tax?

Which of the following statements is correct?

Figure 8-7 The vertical distance between points A and B represents a tax in the market. -Refer to Figure 8-7. As a result of the tax,

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: International Trade

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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