Exam 8: Taxes

-The figure above shows the market for tickets to the Super Bowl the day of the game.Suppose the government imposes an entertainment tax of $100 per ticket. a.What is the equilibrium price of a Super Bowl ticket before the tax? What is the price paid by buyers after the tax? What is the price received by sellers after the tax? b.What is the equilibrium quantity of tickets before the tax? What is the equilibrium quantity after the tax? c.Do buyers or sellers bear most of the incidence of the tax?

Cigarettes are highly addictive and therefore have a very low elasticity of demand.A $2.00 increase in the national sales tax on cigarettes would likely cause the price paid by buyers of cigarettes to

The assertion that Bill Gates and Paris Hilton should pay more taxes than Average Joe best represents the idea of

The ability-to-pay principle of tax fairness is equivalent to which of the following?

The average tax rate is the

Which would be a better source of tax revenue for the government,a good with elastic or a good with an inelastic demand? Explain your reasoning.

-The above figure shows the market for capital.Without a tax on capital income,the interest rate is ________ and firms use ________ million of capital.

For a given elasticity of demand,the less elastic the supply,the

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. -Based on the figure above,after the tax is imposed,the price paid by the buyer is ________,and the price received (and kept)by the seller is ________.

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

If a tax of 5 cents a tomato lowers the price received by tomato sellers by 5 cents a tomato,then the supply of tomatoes is perfectly ________ and the seller pays ________ the tax.

The deadweight loss of a tax on labor income is

The imposition of ________ shifts the labor demand curve downward.

The incidence of a tax refers to

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

The government once imposed a luxury tax on very expensive jewelry.This tax followed the ________ principle.

-The figure above shows the market for gasoline.The government has imposed a tax on gasoline. a.What is the amount of the tax per gallon of gasoline? b.How much tax revenue will government collect from this tax? c.How much of the tax is paid by buyers? How much is paid by sellers? Which is more elastic,the supply or demand for gasoline?

Assume that the government passes a tax so that every individual must pay $100.This tax is a

Using fuel taxes to pay for maintaining public highways is an example of

When a product is taxed,