Economics Chapter 7 Multiple Choice Suppose The Government Imposes P

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Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A quota

of ________ will bring about the same price and output in the market for yachts as

would an excise tax of $30,000.

Answer 2,000

58. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price

________ of ________ will bring about the same price and output in the market for

yachts as would an excise tax of $30,000.

Answer ceiling; $80,000

59. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the

government imposes a $60,000 tax on yachts (collected from the producers),

consumers will pay ________ of the tax and producers will pay ________.

Answer $30,000; $30,000

60. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A quota

of ________ will bring about the same price and output in the market for yachts as

would an excise tax of $60,000.

The answer is impossible to determine.

61. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price

________ of ________ will bring the about the same price and output in the market

for yachts as would an excise tax of $60,000.

Answer ceiling; $80,000

62. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-6

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the

government imposes a $30,000 tax on yachts and collects it from the yacht

suppliers, the ________ curve will shift ________ by ________.

Answer demand; downward; $15,000

63. Multiple Choice: An excise tax is a tax charged on:

Question An excise tax is a tax charged on:

the inheritance of assets.

64. Multiple Choice: Prior to any taxes, the equilibrium p...

Question

Points: 0

Prior to any taxes, the equilibrium price of gasoline is $3 per gallon. Then a $1 tax

is levied on each gallon of gas. As a result, the price of gasoline rises to $3.75 per

gallon. The incidence of the $1 tax is:

Answer $0.25 paid by consumers, $0.75 paid by producers.

65. Multiple Choice: Which of the following is an example ...

Question Which of the following is an example of an excise tax?

a one–time local government tax of $50

66. Multiple Choice: If an excise tax is levied on supplie…

Question If an excise tax is levied on suppliers, then the incidence of the tax:

Answer is typically on the consumer more than the producer.

67. Multiple Choice: Figure: Market for Hotel Rooms Refere…

Question

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Figure: Market for Hotel Rooms

Reference: Ref 7-7

(Figure: The Market for Hotel Rooms) Look at the figure The Market for Hotel

Rooms. Suppose the equilibrium price is $110 and the equilibrium quantity is 250.

If the local government levies a tax of $30 per night on each hotel room rented, the

new equilibrium price will equal ________ and the new equilibrium quantity will

equal ________.

Answer $140; 100

68. Multiple Choice: Taxes paid on the purchase of specifi...

Question Taxes paid on the purchase of specific items such as gasoline, cigarettes, or

alcoholic beverages are called:

Answer personal income taxes.

69. Multiple Choice: Determining who pays the burden of th...

Question Determining who pays the burden of the tax is a question about:

Points: 0

70. Multiple Choice: Tax incidence analysis seeks to deter...

Question Tax incidence analysis seeks to determine:

Answer who actually sends the tax payment to the government.

71. Multiple Choice: Determining who actually pays the ext...

Question Determining who actually pays the extra cost imposed by a tax is the study of:

Answer public interest theory.

72. Multiple Choice: The burden of a tax imposed on a good...

Question The burden of a tax imposed on a good falls at least partially on consumers if:

Answer the price paid by consumers for the good declines.

73. Multiple Choice: State governments levy excise taxes o...

Question State governments levy excise taxes on cigarettes because:

Answer they want to subsidize tobacco farming.

Points: 0

74. Multiple Choice: Suppose the government imposes a $4 p...

Question Suppose the government imposes a $4 per month excise tax on cable TV. If the

demand for cable TV is relatively inelastic and the supply curve is relatively elastic,

then the price of cable TV will:

Answer increase by more than $4.

75. Multiple Choice: Suppose the government imposes a $4 p...

Question Suppose the government imposes a $4 per month excise tax on cable TV. If the

demand for cable TV is perfectly inelastic and the supply curve is elastic, then the

price of cable TV will:

Answer increase by more than $4.

76. Multiple Choice: If the demand curve is downward slopi...

Question If the demand curve is downward sloping and supply is perfectly elastic, then the

burden of an excise tax is:

Points: 0

77. Multiple Choice: If demand is perfectly inelastic and ...

Question If demand is perfectly inelastic and the supply curve is upward sloping, then the

burden of an excise tax is:

78. Multiple Choice: As part of an antiobesity program, th...

Question As part of an antiobesity program, the government levies an excise tax on high–fat

foods. We would expect consumers to pay almost all of this tax if demand is:

Answer inelastic and supply is inelastic.

79. Multiple Choice: Economic analysis shows that workers ...

Question Economic analysis shows that workers pay ________ of the FICA.

Answer exactly half

Points: 0

80. Multiple Choice: Suppose the government imposes a $10 ...

Question Suppose the government imposes a $10 per month tax on cell phone service. If the

demand curve for cell phone service is perfectly inelastic and the supply curve is

upward sloping, the price that consumers each month pay for cell phone service

will increase by:

Answer $5.

81. Multiple Choice: Suppose the government imposes a $9 p...

Question Suppose the government imposes a $9 per month tax on cell phone service. If the

demand curve for cell phone service is perfectly elastic and the supply curve is

upward sloping, the price that consumers pay each month for cell phone service

will:

Answer increase by $4.50.

82. Multiple Choice: When a worker earns income, she and h...

Question When a worker earns income, she and her employer pay equal portions of FICA

(the Federal Insurance Contributions Act). Which of the following statements is

true?

Answer The worker and the employer each bear half of the burden (incidence) of the

tax.

83. Multiple Choice: The price elasticity of demand for a ...

Points: 0

Question The price elasticity of demand for a particular cancer drug is equal to zero and the

price elasticity of supply is equal to 0.50. If a $1 excise tax is levied on producers,

how much of this tax will eventually be paid by consumers?

Answer $0

84. Multiple Choice: The demand for food is very inelastic...

Question The demand for food is very inelastic, so if a tax is levied on the consumers of food,

the tax incidence:

cannot be determined without more information.

85. Multiple Choice: The elasticity of demand for Gala app...

Question The elasticity of demand for Gala apples is relatively elastic, so if a tax is levied on

the consumers of Gala apples, the tax incidence:

Answer is typically on consumers more than producers.

86. Multiple Choice: Figure: The Shrimp Market Reference: …

Question

Points: 0

Figure: The Shrimp Market

Reference: Ref 7-8

(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the

government wants to limit shrimp sales to 500 pounds, it can impose a ________

excise tax on sellers, and the total tax revenue generated will be ________.

87. Multiple Choice: Figure: The Shrimp Market Reference: …

Question

Points: 0

Figure: The Shrimp Market

Reference: Ref 7-8

(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the

government wants to limit shrimp sales to 250 pounds, it can impose a ________

excise tax on sellers, and the total tax revenue generated will be ________.

Answer $5; $2,500

88. Multiple Choice: Figure: The Market for Yachts Referen...

Question

Points: 0

Figure: The Market for Yachts

Reference: Ref 7-9

(Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the

government imposes a $60,000 tax on yachts (collected from the producers), the

price of yachts will rise to ________ and the government will collect tax revenue

equal to ________.

Answer $100,000; $120 million

89. Multiple Choice: A higher tax rate is more likely to i...

Question A higher tax rate is more likely to increase tax revenue collected if the price

elasticity of:

Answer demand and supply are both high.

90. Multiple Choice: The amount of tax levied per unit of ...

Points: 0

Question The amount of tax levied per unit of good or service is called the:

Answer tax incidence.

91. Multiple Choice: A higher rate is most likely to decre…

Question A higher rate is most likely to decrease the amount of revenue that the government

collects from an excise tax if

demand and supply are both very inelastic.

92. Multiple Choice: If demand and supply are both very in...

Question If demand and supply are both very inelastic, a decrease in the rate of an excise

tax will likely

make demand and supply both elastic.

93. Multiple Choice: If demand and supply are both very el…

Question If demand and supply are both very elastic, a decrease in the rate of an excise tax

will likely

Answer decrease government revenue.

Points: 0

94. Multiple Choice: In which of the following cases will ...

Question In which of the following cases will an increase in the tax rate most likely decrease

tax revenue?

The elasticity of demand is 0.2 and the elasticity of supply is 0.5.

95. Multiple Choice: In which of the following cases will ...

Question In which of the following cases will an increase in the tax rate most likely increase

tax revenue?

Answer The elasticity of demand is 3.3 and the elasticity of supply is 2.1.

96. Multiple Choice: If the United States removed all exci...

Question If the United States removed all excise taxes on cigarettes, which of the following

would not occur?

Total surplus in the U.S. cigarette market would increase.

97. Multiple Choice: When the government imposes an excise…

Question When the government imposes an excise tax in a market:

Answer consumer surplus falls.

Points: 0

producer surplus falls.

98. Multiple Choice: If the government removed the excise …

Question If the government removed the excise tax on gasoline, which of the following would

not occur?

Answer Consumer surplus would increase.

Producer surplus would increase.

99. Multiple Choice: The deadweight loss from an excise ta...

Question The deadweight loss from an excise tax comes about because:

Answer the number of transactions in the market is reduced.

100. Multiple Choice: A tax leads to ________ in consumer s...

Question A tax leads to ________ in consumer surplus and ________ in producer surplus.

Answer an increase; an increase

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101. Multiple Choice: The burden of a tax system comes from…

Question The burden of a tax system comes from its:

Answer administrative costs.

102. Multiple Choice: Assume the same upward supply curve f...

Question Assume the same upward supply curve for each of the following goods.

Considering demand only, a tax on which of the following goods would result in the

largest deadweight loss?

Answer gasoline

103. Multiple Choice: If the government decides to impose a...

Question If the government decides to impose a $700 tax on U.S. citizens traveling abroad,

then the deadweight loss from this tax will be:

Answer relatively small.

104. Multiple Choice: The number of seats in a football sta...

Question

Points: 0