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Chapter 6/Supply, Demand, And Government Policies ❖ 61
79. Refer to Figure 6-15. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay
per unit after the tax is imposed?
a.
$3
b.
between $3 and $5
c.
between $5 and $7
d.
$7
80. Refer to Figure 6-15. Suppose a tax of $2 per unit is imposed on this market. Which of the following is cor-
rect?
a.
One-fourth of the burden of the tax will fall on buyers, and three-fourths of the burden of the tax
will fall on sellers.
b.
One-third of the burden of the tax will fall on buyers, and two-thirds of the burden of the tax will
fall on sellers.
c.
One-half of the burden of the tax will fall on buyers ,and one-half of the burden of the tax will fall
on sellers.
d.
Two-thirds of the burden of the tax will fall on buyers, and one-third of the burden of the tax will
fall on sellers.
Figure 6-16
10
14
5
25 50
D
S
quantity
price
81. Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilib-
rium quantity in this market?
a.
less than 25 units
b.
25 units
c.
between 25 units and 50 units
d.
greater than 50 units
62 ❖ Chapter 6/Supply, Demand, and Government Policies
82. Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will sellers receive
per unit after the tax is imposed?
a.
$5
b.
between $5 and $10
c.
between $10 and $14
d.
$14
83. Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay
per unit after the tax is imposed?
a.
$5
b.
between $5 and $10
c.
between $10 and $14
d.
$14
84. Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. Which of the following is cor-
rect?
a.
Buyers and sellers will share the burden of the tax equally.
b.
Buyers will bear more of the burden of the tax than sellers will.
c.
Sellers will bear more of the burden of the tax than buyers will.
Figure 6-17
S
Demand
S
8
105
2
1
40 80 120 160 Quantity
3
6
9
12
15
Price
85. Refer to Figure 6-17. What is the amount of the tax per unit?
a.
$1
b.
$2
c.
$3
d.
$4
Chapter 6/Supply, Demand, And Government Policies ❖ 63
86. Refer to Figure 6-17. The price that buyers pay after the tax is imposed is
a.
$8.00.
b.
$9.00.
c.
$10.50.
d.
$12.00.
87. Refer to Figure 6-17. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then
pays the tax on that unit to the government. Acme is left with how much money?
a.
$8.00
b.
$9.00
c.
$10.50
d.
$12.00
88. Refer to Figure 6-17. How is the burden of the tax shared between buyers and sellers? Buyers bear
a.
three-fourths of the burden, and sellers bear one-fourth of the burden.
b.
two-thirds of the burden, and sellers bear one-third of the burden.
c.
one-half of the burden, and sellers bear one-half of the burden.
d.
one-fourth of the burden, and sellers bear three-fourths of the burden.
89. Refer to Figure 6-17. In the after-tax equilibrium, how much revenue does the government collect from the
tax on this good?
a.
$210
b.
$345
c.
$420
d.
$480
90. Refer to Figure 6-17. Suppose buyers, rather than sellers, were required to pay this tax (in the same amount
per unit as shown in the graph). Relative to the tax on sellers, the tax on buyers would result in
a.
buyers bearing a larger share of the tax burden.
b.
sellers bearing a smaller share of the tax burden.
c.
the same amount of tax revenue for the government.
d.
Both a) and b) are correct.
64 ❖ Chapter 6/Supply, Demand, and Government Policies
Figure 6-18
S
D
S after tax
510 15 20 25 30 35 40 45 50 55 60 65 70 quantity
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
6.5
7
price
91. Refer to Figure 6-18. The equilibrium price in the market before the tax is imposed is
a.
$3.50.
b.
$5.
c.
$6.
d.
$7.
92. Refer to Figure 6-18. As the figure is drawn, who sends the tax payment to the government?
a.
The buyers send the tax payment.
b.
The sellers send the tax payment.
c.
A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
d.
The question of who sends the tax payment cannot be determined from the graph.
93. Refer to Figure 6-18. The price paid by buyers after the tax is imposed is
a.
$2.50.
b.
$3.50.
c.
$5.00.
d.
$6.00.
Chapter 6/Supply, Demand, And Government Policies ❖ 65
94. Refer to Figure 6-18. The effective price sellers receive after the tax is imposed is
a.
$2.50.
b.
$3.50.
c.
$5.00.
d.
$6.00.
95. Refer to Figure 6-18. The amount of the tax per unit is
a.
$1.
b.
$1.50.
c.
$2.50.
d.
$3.50.
96. Refer to Figure 6-18. Buyers pay how much of the tax per unit?
a.
$1.
b.
$1.50.
c.
$2.50.
d.
$3.50.
97. Refer to Figure 6-18. Sellers pay how much of the tax per unit?
a.
$1.00.
b.
$1.50.
c.
$2.50.
d.
$3.50.
98. Refer to Figure 6-18. Suppose the same supply and demand curves apply, and a tax of the same amount per
unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to
pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the bur-
den on buyers will be
a.
larger, and the burden on sellers will be smaller.
b.
smaller, and the burden on sellers will be larger.
c.
the same, and the burden on sellers will be the same.
d.
The relative burdens in the two cases cannot be determined without further information.
99. Refer to Figure 6-18. How much tax revenue does this tax generate for the government?
a.
$75
b.
$125
c.
$175
d.
$300
66 ❖ Chapter 6/Supply, Demand, and Government Policies
Figure 6-19
D
S
S after tax
246810 12 14 16 quantity
1
2
3
4
5
6
7
8
9
price
100. Refer to Figure 6-19. The price paid by buyers after the tax is imposed is
a.
$3.
b.
$4.
c.
$5.
d.
$7.
101. Refer to Figure 6-19. The effective price received by sellers after the tax is imposed is
a.
$3.
b.
$4.
c.
$5.
d.
$7.
102. Refer to Figure 6-19. For every unit of the good that is sold, sellers are required to send
a.
one dollar to the government, and buyers are required to send two dollars to the government.
b.
two dollars to the government, and buyers are required to send one dollar to the government.
c.
three dollars to the government, and buyers are required to send nothing to the government.
d.
nothing to the government, and buyers are required to send two dollars to the government.
Chapter 6/Supply, Demand, And Government Policies ❖ 67
103. Refer to Figure 6-19. Which of the following is correct?
a.
One-fourth of the burden of the tax falls on buyers, and three-fourths of the burden of the tax falls
on sellers.
b.
One-third of the burden of the tax falls on buyers, and two-thirds of the burden of the tax falls on
sellers.
c.
One-half of the burden of the tax falls on buyers, and one-half of the burden of the tax falls on
sellers.
d.
Two-thirds of the burden of the tax falls on buyers, and one-third of the burden of the tax falls on
sellers.
104. Refer to Figure 6-19. How much tax revenue does this tax produce for the government?
a.
$24
b.
$30
c.
$32
d.
$56
105. If a tax is levied on the buyers of dog food, then
a.
buyers will bear the entire burden of the tax.
b.
sellers will bear the entire burden of the tax.
c.
buyers and sellers will share the burden of the tax.
d.
the government will bear the entire burden of the tax.
106. Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would
a.
shift the demand curve downward by less than $40.
b.
raise the equilibrium price by $40.
c.
create a $20 tax burden each for buyers and sellers.
d.
discourage market activity.
68 ❖ Chapter 6/Supply, Demand, and Government Policies
Figure 6-20
Supply
D
16
210
D1
2
80 160 240 320 Quantity
6
12
18
24
30
Price
107. Refer to Figure 6-20. Which of the following statements is correct?
a.
The amount of the tax per unit is $6.
b.
The tax leaves the size of the market unchanged.
c.
The tax is levied on buyers of the good, rather than on sellers.
d.
All of the above are correct.
108. Refer to Figure 6-20. What is the amount of the tax per unit?
a.
$8
b.
$6
c.
$4
d.
$2
109. Refer to Figure 6-20. The price paid by buyers after the tax is imposed is
a.
$24.
b.
$21.
c.
$18.
d.
$16.
110. Refer to Figure 6-20. The per-unit burden of the tax on buyers of the good is
a.
$2.
b.
$4.
c.
$6.
d.
$8.
Chapter 6/Supply, Demand, And Government Policies ❖ 69
111. Refer to Figure 6-20. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew
effectively pay to acquire one unit of the good?
a.
$16
b.
$18
c.
$24
d.
$26
112. Refer to Figure 6-20. Suppose sellers, rather than buyers, were required to pay this tax (in the same amount
per unit as shown in the graph). Relative to the tax on buyers, the tax on sellers would result in
a.
buyers bearing the same share of the tax burden.
b.
sellers bearing the same share of the tax burden.
c.
the same amount of tax revenue for the government.
d.
All of the above are correct.
113. Refer to Figure 6-20. In the after-tax equilibrium, government collects
a.
$1,440 in tax revenue; of this amount, $960 represents a burden on buyers and $480 represents a
burden on sellers.
b.
$1,440 in tax revenue; of this amount, $720 represents a burden on buyers and $720 represents a
burden on sellers.
c.
$1,680 in tax revenue; of this amount, $1,260 represents a burden on buyers and $420 represents a
burden on sellers.
d.
$1,680 in tax revenue; of this amount, $840 represents a burden on buyers and $840 represents a
burden on sellers.
70 ❖ Chapter 6/Supply, Demand, and Government Policies
Figure 6-21
S
D
D after tax
10 20 30 40 50 60 70 80 quantity
1
2
3
4
5
6
7
8
9
10 price
114. Refer to Figure 6-21. The equilibrium price in the market before the tax is imposed is
a.
$1.
b.
$2.
c.
$5.
d.
$6.
115. Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?
a.
The buyers send the tax payment.
b.
The sellers send the tax payment.
c.
A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
d.
The question of who sends the tax payment cannot be determined from the figure.
116. Refer to Figure 6-22. The price that buyers pay after the tax is imposed is
a.
$5.
b.
$6.
c.
$7.
d.
$8.
117. Refer to Figure 6-22. The effective price that sellers receive after the tax is imposed is
a.
$5.
b.
$6.
c.
$7.
d.
$8.
Chapter 6/Supply, Demand, And Government Policies ❖ 71
118. Refer to Figure 6-22. The amount of the tax per unit is
a.
$1.
b.
$1.50.
c.
$2.
d.
$3.
119. Refer to Figure 6-22. The burden of the tax on buyers is
a.
$1 per unit.
b.
$1.50 per unit.
c.
$2 per unit.
d.
$3 per unit.
120. Refer to Figure 6-22. The burden of the tax on sellers is
a.
$1 per unit.
b.
$1.50 per unit.
c.
$2 per unit.
d.
$3 per unit.
121. Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per
unit as shown here is imposed. Now, however, the sellers of the good, rather than the buyers, are required to
pay the tax to the government. After the sellers are required to pay the tax, relative to the case depicted in the
graph, the burden on buyers will be
a.
larger, and the burden on sellers will be smaller.
b.
smaller, and the burden on sellers will be larger.
c.
the same, and the burden on sellers will be the same.
d.
The relative burdens in the two cases cannot be determined without further information.
122. Refer to Figure 6-22. How much tax revenue does this tax generate for the government?
a.
$150
b.
$180
c.
$250
d.
$300
72 ❖ Chapter 6/Supply, Demand, and Government Policies
Figure 6-23
S
D
D after tax
10 20 30 40 50 60 70 80 90 100 110 120 130 quantity
2
4
6
8
10
12
14
16
18
20 price
123. Refer to Figure 6-23. The price paid by buyers after the tax is imposed is
a.
$8.
b.
$10.
c.
$14.
d.
$18.
124. Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is
a.
$8.
b.
$10.
c.
$14.
d.
$18.
125. Refer to Figure 6-23. The amount of the tax per unit is
a.
$4.
b.
$5.
c.
$6.
d.
$10.
126. Refer to Figure 6-23. The per-unit burden of the tax is
a.
$4 for buyers and $6 for sellers.
b.
$5 for buyers and $5 for sellers.
c.
$6 for buyers and $4 for sellers.
d.
$10 for buyers and $0 for sellers.
Chapter 6/Supply, Demand, And Government Policies ❖ 73
127. Refer to Figure 6-23. How much tax revenue does this tax produce for the government?
a.
$480
b.
$600
c.
$800
d.
$1120
128. Which of the following causes the price paid by buyers to be different than the price received by sellers?
a.
a binding price floor
b.
a binding price ceiling
c.
a tax on the good
d.
All of the above are correct.
129. The price paid by buyers in a market will decrease if the government
a.
increases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
decreases a tax on the good sold in that market.
d.
All of the above are correct.
130. The price received by sellers in a market will increase if the government decreases a
a.
binding price floor in that market.
b.
binding price ceiling in that market.
c.
tax on the good sold in that market.
d.
None of the above is correct.
131. The quantity sold in a market will decrease if the government
a.
decreases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
increases a tax on the good sold in that market.
d.
All of the above are correct.
132. The price paid by buyers in a market will increase if the government
a.
decreases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
decreases a tax on the good sold in that market.
d.
imposes a binding price ceiling in that market.
74 ❖ Chapter 6/Supply, Demand, and Government Policies
133. The price received by sellers in a market will increase if the government
a.
decreases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
increases a tax on the good sold in that market.
d.
imposes a binding price ceiling in that market.
134. The price received by sellers in a market will decrease if the government
a.
imposes a binding price floor in that market.
b.
decreases a binding price ceiling in that market.
c.
decreases a tax on the good sold in that market.
d.
increases a binding price floor in that market.
135. The quantity sold in a market will decrease if the government decreases a
a.
binding price floor in that market.
b.
binding price ceiling in that market.
c.
tax on the good sold in that market.
d.
All of the above are correct.
136. Which of the following causes a shortage of a good?
a.
a binding price floor
b.
a binding price ceiling
c.
a tax on the good
d.
None of the above is correct.
137. The price paid by buyers in a market will increase if the government
(i)
increases a binding price floor in that market.
(ii)
increases a binding price ceiling in that market.
(iii)
decreases a tax on the good sold in that market.
a.
(ii) only
b.
(iii) only
c.
(i) and (ii) only
d.
(i), (ii), and (iii)
138. The price received by sellers in a market will decrease if the government
a.
increases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
decreases a tax on the good sold in that market.
d.
None of the above is correct.
Chapter 6/Supply, Demand, And Government Policies ❖ 75
139. The quantity sold in a market will increase if the government
a.
decreases a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
decreases a tax on the good sold in that market.
d.
More than one of the above is correct.
140. The price paid by buyers in a market will decrease if the government
a.
imposes a binding price floor in that market.
b.
increases a binding price ceiling in that market.
c.
increases a tax on the good sold in that market.
d.
decreases a binding price floor in that market.
141. The quantity sold in a market will increase if the government
a.
decreases a binding price floor in that market.
b.
decreases a binding price ceiling in that market.
c.
increases a tax on the good sold in that market.
d.
More than one of the above is correct.
142. Which of the following causes a surplus of a good?
a.
a binding price floor
b.
a binding price ceiling
c.
a tax on the good
d.
More than one of the above is correct.
143. A payroll tax is a
a.
fixed number of dollars that every firm must pay to the government for each worker that the firm
hires.
b.
tax that each firm must pay to the government before the firm can hire workers and operate its
business.
c.
tax on the wages that firms pay their workers.
d.
tax on all wages above the minimum wage.
144. When a payroll tax is enacted, the wage received by workers
a.
falls, and the wage paid by firms rises.
b.
falls, and the wage paid by firms falls.
c.
rises, and the wage paid by firms falls.
d.
rises, and the wage paid by firms rises.
76 ❖ Chapter 6/Supply, Demand, and Government Policies
145. A key lesson from the payroll tax is that the
a.
tax is a tax solely on workers.
b.
tax is a tax solely on firms that hire workers.
c.
tax eliminates any wedge that might exist between the wage that firms pay and the wage that
workers receive.
d.
true burden of a tax cannot be legislated.
146. You receive a paycheck from your employer, and your pay stub indicates that $300 was deducted to pay the
FICA (Social Security/Medicare) tax. Which of the following statements is correct?
a.
The $300 that you paid is not necessarily the true burden of the tax that falls on you, the employee.
b.
Your employer is required by law to pay $300 to match the $300 deducted from your check.
c.
This type of tax is an example of a payroll tax.
d.
All of the above are correct.
147. You receive a paycheck from your employer, and your pay stub indicates that $400 was deducted to pay the
FICA (Social Security/Medicare) tax. Which of the following statements is correct?
a.
This type of tax is an example of a payback tax.
b.
Your employer is required by law to pay $400 to match the $400 deducted from your check.
c.
The $400 that you paid is the true burden of the tax that falls on you, the employee.
d.
All of the above are correct.
148. The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor pro-
poses to collect half the tax from workers and half the tax from firms. The mayor will be able to successfully
divide the burden of the tax equally if the
a.
demand for labor is more elastic than the supply of labor.
b.
supply of labor is more elastic than the demand for labor.
c.
demand for labor and supply of labor are equally elastic.
d.
It is not possible for the tax burden to fall equally on firms and workers.
149. The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor pro-
poses to collect half the tax from workers and half the tax from firms. Workers will bear
a.
an equal share of the tax in comparison to firms.
b.
a greater share of the tax in comparison to firms.
c.
a smaller share of the tax in comparison to firms.
d.
All of the above are possible.
Chapter 6/Supply, Demand, And Government Policies ❖ 77
150. Most labor economists believe that the supply of labor is
a.
less elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.
b.
less elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
c.
more elastic than the demand, and, therefore, workers bear most of the burden of the payroll tax.
d.
more elastic than the demand, and, therefore, firms bear most of the burden of the payroll tax.
151. The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for
a.
unemployment compensation.
b.
the salaries of members of Congress.
c.
Social Security and Medicare.
d.
housing subsidies for low-income people.
152. The Federal Insurance Contribution Act (FICA) tax is an example of a(n)
a.
payroll tax.
b.
sales tax.
c.
farm subsidy.
d.
income subsidy.
153. Congress intended that
a.
the entire FICA tax be paid by workers.
b.
the entire FICA tax be paid by firms.
c.
one-quarter of the FICA tax be paid by workers, and three-quarters be paid by firms.
d.
half the FICA tax be paid by workers, and half be paid by firms.
154. Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,
a.
the actual tax incidence is unaffected by the legislated tax incidence.
b.
the employer now is required by law to pay more than 50 percent of the tax.
c.
the employee now is required by law to pay more than 50 percent of the tax.
d.
employers are no longer required by law to pay any portion of the tax.
155. Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms. Labor
economists believe that
a.
lawmakers may have actually achieved their goal because statistics show that the tax burden is
currently equally divided.
b.
the tax raises too little revenue for the government, so it should be eliminated.
c.
firms bear most of the burden of the tax.
d.
workers bear most of the burden of the tax.
78 ❖ Chapter 6/Supply, Demand, and Government Policies
156. Tax incidence
a.
depends on the legislated burden.
b.
is entirely random.
c.
depends on the elasticities of supply and demand.
d.
falls entirely on buyers or entirely on sellers.
157. The incidence of a tax falls more heavily on
a.
consumers than producers if demand is more inelastic than supply.
b.
producers than consumers if supply is more inelastic than demand.
c.
consumers than producers if supply is more elastic than demand.
d.
All of the above are correct.
158. Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic.
If a tax is imposed in this market, then the
a.
buyers will bear a greater burden of the tax than the sellers.
b.
sellers will bear a greater burden of the tax than the buyers.
c.
buyers and sellers are likely to share the burden of the tax equally.
d.
buyers and sellers will not share the burden equally, but it is impossible to determine who will bear
the greater burden of the tax without more information.
159. If a tax is imposed on a market with inelastic demand and elastic supply, then
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.
it is impossible to determine how the burden of the tax will be shared.
160. Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elas-
tic. A tax of $1 per frame levied on picture frames will increase the price paid by buyers of picture frames by
a.
less than $0.50.
b.
$0.50.
c.
between $0.50 and $1.
d.
$1.
Chapter 6/Supply, Demand, And Government Policies ❖ 79
161. Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elas-
tic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of pic-
ture frames by
a.
less than $0.50.
b.
$0.50.
c.
between $0.50 and $1.
d.
$1.
162. The tax burden will fall most heavily on buyers of the good when the demand curve
a.
is relatively steep, and the supply curve is relatively flat.
b.
is relatively flat, and the supply curve is relatively steep.
c.
and the supply curve are both relatively flat.
d.
and the supply curve are both relatively steep.
163. Buyers of a good bear the larger share of the tax burden when the
(i)
supply is more elastic than the demand for the product.
(ii)
demand in more elastic than the supply for the product.
(iii)
tax is placed on the sellers of the product.
(iv)
tax is placed on the buyers of the product.
a.
(i) only
b.
(ii) only
c.
(i) and (iii) only
d.
(i) and (iv) only
164. Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the
a.
demand is more inelastic than the supply.
b.
supply is more inelastic than the demand.
c.
government has required that buyers remit the tax payments.
d.
government has required that sellers remit the tax payments.
165. Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelas-
tic. If a tax is imposed in this market, then the
a.
buyers will bear a greater burden of the tax than the sellers.
b.
sellers will bear a greater burden of the tax than the buyers.
c.
buyers and sellers are likely to share the burden of the tax equally.
d.
buyers and sellers will not share the burden equally, but it is impossible to determine who will bear
the greater burden of the tax without more information.
80 ❖ Chapter 6/Supply, Demand, and Government Policies
166. If a tax is imposed on a market with inelastic supply and elastic demand, then
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.
it is impossible to determine how the burden of the tax will be shared.
167. Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per
lamp levied on lava lamps will increase the price paid by buyers of lava lamps by
a.
less than $1.
b.
$1.
c.
between $1 and $2.
d.
$2.
168. Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of
$20 per camera levied on digital cameras will decrease the effective price received by sellers of digital camer-
as by
a.
less than $10.
b.
$10.
c.
between $10 and $20.
d.
$20.
169. The tax burden will fall most heavily on sellers of the good when the demand curve
a.
is relatively steep, and the supply curve is relatively flat.
b.
is relatively flat, and the supply curve is relatively steep.
c.
and the supply curve are both relatively flat.
d.
and the supply curve are both relatively steep.
170. Sellers of a good bear the larger share of the tax burden when a tax is placed on a product for which the
(i)
supply is more elastic than the demand.
(ii)
demand in more elastic than the supply.
(iii)
tax is placed on the sellers of the product.
(iv)
tax is placed on the buyers of the product.
a.
(i) only
b.
(ii) only
c.
(i) and (iv) only
d.
(ii) and (iii) only
