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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
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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:
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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.
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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:
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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
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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 ...
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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
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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
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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
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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 ...
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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.
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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.
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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
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