Application: The Costs of Taxation 2031
77.
Refer to Figure 8-1. Suppose the government imposes a tax of P’ – P”’. The deadweight loss
due to the tax is
measured by the area
a.
J+K+L+M.
b.
J+K+L+M+N.
c.
I+Y.
d.
I+Y+B.
Figure 8-2
The vertical distance between points A and B represents a tax in the market.
78.
Refer to Figure 8-2. The imposition of the tax causes the quantity sold to
a.
increase by 1 unit.
b.
decrease by 1 unit.
c.
increase by 2 units.
d.
decrease by 2 units.
79.
Refer to Figure 8-2. The imposition of the tax causes the price paid by buyers to
a.
decrease by $2.
b.
increase by $3.
c.
decrease by $4.
d.
increase by $5.
80.
Refer to Figure 8-2. The imposition of the tax causes the price received by sellers to
a.
decrease by $2.
b.
increase by $3.
c.
decrease by $4.
d.
increase by $5.
81.
Refer to Figure 8-2. The amount of the tax on each unit of the good is
a.
$1.
b.
$4.
c.
$5.
d.
$9.
82.
Refer to Figure 8-2. The per-unit burden of the tax on buyers is
a. $2.
b.
$3.
c.
$4.
d.
$5.
83.
Refer to Figure 8-2. The per-unit burden of the tax on sellers is
a. $2.
b.
$3.
c.
$4.
d.
$5.
84.
Refer to Figure 8-2. The amount of tax revenue received by the government is
a. $2.50.
b.
$4.
c.
$5.
d.
$9.
85.
Refer to Figure 8-2. The amount of deadweight loss as a result of the tax is
a. $2.50.
b. $5.
c. $7.50.
d. $10.
86.
Refer to Figure 8-2. The loss of consumer surplus as a result of the tax is
a. $1.50.
b. $3.
c. $4.50.
d. $6.
87.
Refer to Figure 8-2. The loss of producer surplus as a result of the tax is
a. $1.
b.
$2.
c.
$3.
d.
$4.
88.
Refer to Figure 8-2. Consumer surplus without the tax is
a.
$6, and consumer surplus with the tax is $1.50.
b.
$6, and consumer surplus with the tax is $4.50.
c.
$10, and consumer surplus with the tax is $1.50.
d.
$10, and consumer surplus with the tax is $4.50.
89.
Refer to Figure 8-2. Producer surplus without the tax is
a.
$4, and producer surplus with the tax is $1.
b.
$4, and producer surplus with the tax is $3.
c.
$10, and producer surplus with the tax is $1.
d.
$10, and producer surplus with the tax is $3.
90.
Refer to Figure 8-2. Total surplus without the tax is
a.
$10, and total surplus with the tax is $2.50.
b.
$10, and total surplus with the tax is $7.50.
c.
$20, and total surplus with the tax is $2.50.
d.
$20, and total surplus with the tax is $7.50.
91.
Refer to Figure 8-2. The loss of consumer surplus associated with some buyers dropping out of
the market as a
result of the tax is
a.
$0.
b. $1.50.
c. $3.
d. $4.50.
92.
Refer to Figure 8-2. The loss of consumer surplus for those buyers of the good who continue to
buy it after the
tax is imposed is
a.
$0.
b. $1.50.
c.
$3.
d. $4.50.
93.
Refer to Figure 8-2. The loss of producer surplus associated with some sellers dropping out of
the market as a
result of the tax is
a.
$0.
b.
$1.
c.
$2.
d.
$3.
94.
Refer to Figure 8-2. The loss of producer surplus for those sellers of the good who continue to
sell it after the tax
is imposed is
a.
$0.
b.
$1.
c.
$2.
d.
$3.
2040 Application: The Costs of Taxation
Figure 8-3
The vertical distance between points A and C represents a tax in the market.
95.
Refer to Figure 8-3. The equilibrium price before the tax is imposed is
a.
P1.
b.
P2.
c.
P3.
d.
P4.
96.
Refer to Figure 8-3. The price that buyers effectively pay after the tax is imposed is
a.
P1.
b.
P2.
c.
P3.
d.
P4.
97.
Refer to Figure 8-3. The price that sellers effectively receive after the tax is imposed is
a.
P1.
b.
P2.
c.
P3.
d.
P4.
98.
Refer to Figure 8-3. The per unit burden of the tax on buyers is
a.
P3 – P1.
b.
P3 – P2.
c.
P2 – P1.
d.
P4 – P3.
2042 Application: The Costs of Taxation
Application: The Costs of Taxation 2043
99.
Refer to Figure 8-3. The per-unit burden of the tax on sellers is
a.
P3 – P1.
b.
P3 – P2.
c.
P2 – P1.
d.
P4 – P3.
100.
Refer to Figure 8-3. The amount of the tax on each unit of the good is
a.
P3 – P1.
b.
P3 – P2.
c.
P2 – P1.
d.
P4 – P3.
101.
Refer to Figure 8-3. The amount of tax revenue received by the government is equal to the
area
a.
P3ACP1.
b.
ABC.
c.
P2DAP3.
d.
P1CDP2.
102.
Refer to Figure 8-3. The amount of deadweight loss associated with the tax is equal to
a.
P3ACP1.
b.
ABC.
c.
P2ADP3.
d.
P1DCP2.
103.
Refer to Figure 8-3. The loss in consumer surplus caused by the tax is measured by the area
a.
P1P3AC.
b.
P3ABP2.
c.
P1P3ABC.
d.
ABC.
104.
Refer to Figure 8-3. The loss in producer surplus caused by the tax is measured by the area
a.
ABC.
b.
P1P3ABC.
c.
P1P2BC.
d.
P1C0.
105.
Refer to Figure 8-3. Which of the following equations is valid for the tax revenue that the tax
provides to the
government?
a.
Tax revenue = (P2 – P1)xQ1
b.
Tax revenue = (P3 – P1)xQ1
c.
Tax revenue = (P3 – P2)xQ1
d.
Tax revenue = (P3 – P1)x(Q2 – Q1)
106.
Refer to Figure 8-3. Which of the following equations is valid for the deadweight loss of the
tax?
a.
Deadweight loss = (1/2)(P2 – P1)(Q2 + Q1)
b.
Deadweight loss = (1/2)(P3 – P1)(Q2 + Q1)
c.
Deadweight loss = (1/2)(P3 – P2)(Q2 – Q1)
d.
Deadweight loss = (1/2)(P3 – P1)(Q2 – Q1)
Application: The Costs of Taxation 2047
Figure 8-4
The vertical distance between points A and B represents a tax in the market.
107.
Refer to Figure 8-4. The equilibrium price before the tax is imposed is
a.
$12, and the equilibrium quantity is 35.
b.
$8, and the equilibrium quantity is 50.
c.
$5, and the equilibrium quantity is 35.
d.
$5, and the equilibrium quantity is 50.
108.
Refer to Figure 8-4. The price that buyers effectively pay after the tax is imposed is
a. $12.
b.
between $8 and $12.
c.
between $5 and $8.
d. $5.
109.
Refer to Figure 8-4. The price that sellers effectively receive after the tax is imposed is
a. $12.
b.
between $8 and $12.
c.
between $5 and $8.
d. $5.
110.
Refer to Figure 8-4. The per-unit burden of the tax on buyers is
a. $3.
b.
$4.
c.
$5.
d.
$8.
111.
Refer to Figure 8-4. The per-unit burden of the tax on sellers is
a.
$7.
b.
$5.
c.
$4.
d.
$3.
112.
Refer to Figure 8-4. The amount of the tax on each unit of the good is
a.
$5.
b.
$7.
c.
$8.
d.
$12.
113.
Refer to Figure 8-4. The amount of tax revenue received by the government is equal to
a. $245.
b. $350.
c. $490.
d. $700.
114.
Refer to Figure 8-4. The amount of deadweight loss as a result of the tax is
a. $35.00.
b. $45.25.
c. $52.50.
d. $105.00.