Supply, Demand, and Government Policies 1535
17.
If a tax is levied on the sellers of a product, then there will be a(n)
a.
downward shift of the demand curve.
b.
upward shift of the demand curve.
c.
decrease in quantity demanded.
d.
increase in quantity demanded.
18.
If a tax is levied on the sellers of a product, then the supply curve will
a.
shift up.
b.
shift down.
c.
become flatter.
d.
not shift.
19.
If a tax is levied on the sellers of a product, then there will be a(n)
a.
downward shift of the supply curve.
b.
upward shift of the supply curve.
c.
decrease in quantity supplied.
d.
increase in quantity supplied.
20.
A tax on the buyers of cameras encourages
a.
sellers to supply a smaller quantity at every price.
b.
buyers to demand a smaller quantity at every price.
c.
sellers to supply a larger quantity at every price.
d.
Both a) and b) are correct.
21.
A tax levied on the sellers of blueberries
a.
increases sellers’ costs, reduces profits, and shifts the supply curve up.
b.
increases sellers’ costs, reduces profits, and shifts the supply curve down.
c.
decreases sellers’ costs, increases profits, and shifts the supply curve up.
d.
decreases sellers’ costs, increases profits, and shifts the supply curve down.
22.
A tax on sellers will shift the
a.
demand curve upward by the amount of the tax.
b.
demand curve downward by the amount of the tax.
c.
supply curve upward by the amount of the tax.
d.
supply curve downward by the amount of the tax.
23.
When a tax is imposed on the sellers of a good, the supply curve shifts
a.
upward by the amount of the tax.
b.
downward by the amount of the tax.
c.
upward by less than the amount of the tax.
d.
downward by less than the amount of the tax.
24.
A $2.00 tax levied on the sellers of birdhouses will shift the supply curve
a.
upward by exactly $2.00.
b.
upward by less than $2.00.
c.
downward by exactly $2.00.
d.
downward by less than $2.00.
25.
A $0.10 tax levied on the sellers of chocolate bars will cause the
a.
supply curve for chocolate bars to shift down by $0.10.
b.
supply curve for chocolate bars to shift up by $0.10.
c.
demand curve for chocolate bars to shift down by $0.10.
d.
demand curve for chocolate bars to shift up by $0.10.
26.
When a tax is placed on the sellers of a product, the
a.
size of the market decreases.
b.
effective price received by sellers decreases, and the price paid by buyers increases.
c.
supply of the product decreases.
d.
All of the above are correct.
27.
Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are
required to pay the
tax to the government. If the tax is reduced from $50 per ticket to $30 per
ticket, then the
a.
demand curve will shift upward by $20, and the price paid by buyers will decrease by less than
$20.
b.
demand curve will shift upward by $20, and the price paid by buyers will decrease by $20.
c.
supply curve will shift downward by $20, and the effective price received by sellers will
increase by less than
$20.
d.
supply curve will shift downward by $20, and the effective price received by sellers will
increase by $20.
28.
Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are
required to pay the
tax to the government. If the tax is reduced from $50 per ticket to $30 per
ticket, then the
a.
demand curve will shift upward by $20, and the effective price received by sellers will increase
by $20.
b.
demand curve will shift upward by $20, and the effective price received by sellers will increase
by less than
$20.
c.
supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
d.
supply curve will shift downward by $20, and the price paid by buyers will decrease by less
than $20.
29.
Suppose sellers of liquor are required to send $5.00 to the government for every bottle of liquor
they sell. Further,
suppose this tax causes the price paid by buyers of liquor to rise by $3.00 per
bottle. Which of the following
statements is correct?
a.
This tax causes the supply curve for liquor to shift upward by $5.00 at each quantity of liquor.
b.
The effective price received by sellers is $5.00 per bottle less than it was before the tax.
c.
Forty percent of the burden of the tax falls on buyers.
d.
All of the above are correct.
30.
A tax on the buyers of sofas
a.
increases the size of the sofa market.
b.
decreases the size of the sofa market.
c.
has no effect on the size of the sofa market.
d.
may increase, decrease, or have no effect on the size of the sofa market.
31.
When a tax is placed on the buyers of a product, buyers pay
a.
more and sellers receive more than they did before the tax.
b.
more and sellers receive less than they did before the tax.
c.
less and sellers receive more than they did before the tax.
d.
less and sellers receive less than they did before the tax.
32.
A tax on the buyers of cereal will increase the price of cereal paid by buyers,
a.
decrease the effective price of cereal received by sellers, and decrease the equilibrium quantity
of cereal.
b.
decrease the effective price of cereal received by sellers, and increase the equilibrium quantity
of cereal.
c.
increase the effective price of cereal received by sellers, and decrease the equilibrium quantity
of cereal.
d.
increase the effective price of cereal received by sellers, and increase the equilibrium quantity
of cereal.
33.
A tax imposed on the buyers of a good will raise the
a.
price paid by buyers and lower the equilibrium quantity.
b.
price paid by buyers and raise the equilibrium quantity.
c.
effective price received by sellers and lower the equilibrium quantity.
d.
effective price received by sellers and raise the equilibrium quantity.
34.
A tax imposed on the buyers of a good will lower the
a.
price paid by buyers and lower the equilibrium quantity.
b.
price paid by buyers and raise the equilibrium quantity.
c.
effective price received by sellers and lower the equilibrium quantity.
d.
effective price received by sellers and raise the equilibrium quantity.
35.
A tax imposed on the buyers of a good will
a.
raise both the price buyers pay and the effective price sellers receive.
b.
raise the price buyers pay and lower the effective price sellers receive.
c.
lower the price buyers pay and raise the effective price sellers receive.
d.
lower both the price buyers pay and the effective price sellers receive.
36.
If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid
by buyers of NFL
game tickets would
a.
increase by less than $5.
b.
increase by exactly $5.
c.
increase by more than $5.
d.
decrease by an indeterminate amount.
37.
If the government levies a $0.25 tax per MP3 music file downloaded on buyers of MP3 music
files, then the price
received by sellers of MP3 music files would
a.
decrease by more than $0.25.
b.
decrease by exactly $0.25.
c.
decrease by less than $0.25.
d.
increase by an indeterminate amount.
38.
If the government levies a $5 tax per MP3 player on buyers of MP3 players, then the price paid
by buyers of MP3
players would likely
a.
increase by more than $5.
b.
increase by exactly $5.
c.
increase by less than $5.
d.
decrease.
39.
When a tax is placed on the buyers of cell phones, the size of the cell phone market
a.
and the effective price received by sellers both decrease.
b.
decreases, but the effective price received by sellers increases.
c.
increases, but the effective price received by sellers decreases.
d.
and the effective price received by sellers both increase.
40.
When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market
a.
and the price paid by buyers both decrease.
b.
decreases, but the price paid by buyers increases.
c.
increases, but the price paid by buyers decreases.
d.
and the price paid by buyers both increase.
41.
Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka
they buy. Further,
suppose this tax causes the effective price received by sellers of vodka to fall
by $3.00 per bottle. Which of the
following statements is correct?
a.
This tax causes the demand curve for vodka to shift downward by $5.00 at each quantity of
vodka.
b.
The price paid by buyers is $2.00 per bottle more than it was before the tax.
c.
Sixty percent of the burden of the tax falls on sellers.
d.
All of the above are correct.
42.
When a tax is levied on buyers of tea,
a.
buyers of tea and sellers of tea both are made worse off.
b.
buyers of tea are made worse off, and the well-being of sellers is unaffected.
c.
buyers of tea are made worse off, and sellers of tea are made better off.
d.
the well-being of both buyers of tea and sellers of tea is unaffected.
43.
If a tax is levied on the buyers of a product, then the demand curve will
a.
not shift.
b.
shift down.
c.
shift up.
d.
become flatter.
44.
If a tax is levied on the buyers of a product, then there will be a(n)
a.
upward shift of the demand curve.
b.
downward shift of the demand curve.
c.
movement up and to the left along the demand curve.
d.
movement down and to the right along the demand curve.
45.
A tax on the buyers of personal computer external hard drives encourages
a.
sellers to supply a smaller quantity at every price.
b.
buyers to demand a smaller quantity at every price.
c.
buyers to demand a larger quantity at every price.
d.
Both a) and b) are correct.
46.
A tax on buyers will shift the
a.
demand curve upward by the amount of the tax.
b.
demand curve downward by the amount of the tax.
c.
supply curve upward by the amount of the tax.
d.
supply curve downward by the amount of the tax.
47.
When a tax is imposed on the buyers of a good, the demand curve shifts
a.
upward by the amount of the tax.
b.
downward by the amount of the tax.
c.
upward by less than the amount of the tax.
d.
downward by less than the amount of the tax.
48.
A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve
a.
upward by exactly $1.50.
b.
upward by less than $1.50.
c.
downward by exactly $1.50.
d.
downward by less than $1.50.
49.
A $5 tax levied on the buyers of pants will cause the
a.
supply curve for pants to shift down by $5.
b.
supply curve for pants to shift up by $5.
c.
demand curve for pants to shift down by $5.
d.
demand curve for pants to shift up by $5.
50.
When a tax is placed on the buyers of a product, the
a.
size of the market decreases.
b.
effective price received by sellers decreases, and the price paid by buyers increases.
c.
demand for the product decreases.
d.
All of the above are correct.
51.
If the government passes a law requiring buyers of college textbooks to send $5 to the
government for every
textbook they buy, then
a.
the demand curve for textbooks shifts downward by $5.
b.
buyers of textbooks pay $5 more per textbook than they were paying before the tax.
c.
sellers of textbooks are unaffected by the tax.
d.
All of the above are correct.
52.
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are
required to pay the
tax to the government. If the tax is reduced from $50 per ticket to $20 per
ticket, then the
a.
demand curve will shift upward by $30, and the price paid by buyers will decrease by less than
$30.
b.
demand curve will shift upward by $30, and the price paid by buyers will decrease by $30.
c.
supply curve will shift downward by $30, and the effective price received by sellers will
increase by less than
$30.
d.
supply curve will shift downward by $30, and the effective price received by sellers will
increase by $30.
53.
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are
required to pay the
tax to the government. If the tax is reduced from $50 per ticket to $30 per
ticket, then the
a.
demand curve will shift upward by $20, and the effective price received by sellers will increase
by $20.
b.
demand curve will shift upward by $20, and the effective price received by sellers will increase
by less than
$20.
c.
supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
d.
supply curve will shift downward by $20, and the price paid by buyers will decrease by less
than $20.
54.
Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain
drink they buy.
Further, suppose this tax causes the effective price received by sellers of fountain drinks to fall
by $0.20 per drink.
Which of the following statements is correct?
a.
This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each
quantity.
b.
The price paid by buyers is $0.30 per drink more than it was before the tax.
c.
Forty percent of the burden of the tax falls on sellers.
d.
All of the above are correct.
55.
If a tax is levied on the buyers of a product, then the supply curve will
a.
not shift.
b.
shift up.
c.
shift down.
d.
become flatter.
56.
If a tax is levied on the buyers of a product, then there will be a(n)
a.
downward shift of the supply curve.
b.
upward shift of the supply curve.
c.
movement up and to the right along the supply curve.
d.
movement down and to the left along the supply curve.
57.
Which of the following is not correct?
a.
Taxes levied on sellers and taxes levied on buyers are not equivalent.
b.
A tax places a wedge between the price that buyers pay and the price that sellers receive.
c.
The wedge between the buyers’ price and the sellers’ price is the same, regardless of whether
the tax levied on buyers or sellers.
d.
In the new after-tax equilibrium, buyers and sellers share the burden of the tax.
58.
If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers
of gasoline, then
the price paid by buyers will
a.
increase, and the price received by sellers will increase.
b.
increase, and the price received by sellers will not change.
c.
not change, and the price received by sellers will increase.
d.
not change, and the price received by sellers will not change.