Micro answers2 - Direct from text Week 8 1 Multiple Choice...

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Principles of Economics
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Chapter 8 / Exercise 3
Principles of Economics
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Direct from text Week 81. Multiple Choice Q1A tax on a good has a deadweight loss ifthe reduction in consumer and producer surplus is greater than the tax revenue.the tax revenue is greater than the reduction in consumer and producer surplus.the reduction in consumer surplus is greater than the reduction in producer surplus.the reduction in producer surplus is greater than the reduction in consumer surplus.
2. Multiple Choice Q2Jane pays Chuck $50 to mow her lawn every week. When the government levies a mowing tax of $10 on Chuck, he raises his price to $60. Jane continues to hire him at the higher price.What is the change in producer surplus, change in consumer surplus, and deadweight loss?
3. Multiple Choice Q3Eggs have a supply curve that is linear and upward-sloping and a demand curve that is linear anddownward-sloping.If a 2 cent per egg tax is increased to 3 cents, the deadweight loss of the tax
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Principles of Economics
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Chapter 8 / Exercise 3
Principles of Economics
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5. Multiple Choice Q5The Laffer curve illustrates that, in some circumstances, the government can reduce a tax on a good and increase the
6. Multiple Choice Q6If a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses,he should look for goods with ________ elasticities of demand and ________ elasticities of supply.
8. Problems and Applications Q2Indicate whether each of the following statements is true or false.StatementTrue FalseA tax that has no deadweight loss cannot raise any revenue for the government.A tax that raises no revenue for the government cannot have any deadweight loss.10. Problems and Applications Q4Suppose that the government imposes a tax on heating oil.

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