review exercise_costoftax_sol

review exercise_costoftax_sol - Chapter 8 Application: The...

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Chapter 8 Application: The Costs of Taxation 12.When a good is taxed, a. both buyers and sellers of the good are made worse off. b. only buyers are made worse off, because they ultimately bear the burden of the tax. c. only sellers are made worse off, because the government holds them responsible for sending in the tax payments. d. neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy. ANS: A PTS: 1 DIF: 2 REF: 8-1 TOP: Taxes | Economic welfare MSC: Interpretive 13. To measure the gains and losses from a tax on a good, economists use the tools of a. macroeconomics. b. welfare economics. c. international-trade theory. d. circular-flow analysis. ANS: B PTS: 1 DIF: 1 REF: 8-1 TOP: Taxes | Economic welfare MSC: Interpretive 14. When a tax is imposed on a good, a. the supply curve for the good always shifts. b. the demand curve for the good always shifts. c. the amount of the good that buyers are willing to buy at each price always remains unchanged. d. the equilibrium quantity of the good always decreases. ANS: D PTS: 1 DIF: 2 REF: 8-1 TOP: Taxes | Equilibrium quantity MSC: Interpretive 15. A tax levied on the sellers of a good shifts the a. supply curve upward (or to the left). b. supply curve downward (or to the right). c. demand curve upward (or to the right). d. demand curve downward (or to the left). ANS: A PTS: 1 DIF: 2 REF: 8-1 TOP: Tax | Supply curve MSC: Interpretive 16. A tax levied on the buyers of a good shifts the a. supply curve upward (or to the left). b. supply curve downward (or to the right).
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This note was uploaded on 09/15/2009 for the course ECON 201 taught by Professor Shoonlai during the Summer '09 term at Miami University.

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review exercise_costoftax_sol - Chapter 8 Application: The...

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