Quiz%2006%20-%20solutions

Quiz%2006%20-%20solutions - Econ*1050 Introductory...

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Econ*1050 Introductory Microeconomics Instructor: Vitali Alexeev Quiz 6 (Chapter 8) 1) A tax on a good a . raises the price buyers pay and lowers the price sellers receive. b. raises both the price buyers pay and the price sellers receive. c. lowers both the price buyers pay and the price sellers receive. d. lowers the price buyers pay and raises the price sellers receive. 2)Whether a tax is levied on the buyer or seller of the good does not matter because a. sellers always bear the full burden of the tax. b. buyers always bear the full burden of the tax. c. buyers and sellers will share the burden of the tax. d. sellers bear the full burden if the tax is levied on them, and buyers bear the full burden if the tax is levied on them. 3) When a tax is imposed on a product, quantity demanded a. will increase and quantity supplied will decrease. b. will decrease and quantity supplied will increase. c. and quantity supplied will both increase. d. and quantity supplied will both decrease. e. will decrease, but quantity supplied will not change. Figure 8-2 4) Refer to Figure 8-2. The amount of tax revenue received by the government is equal to the area a. P 3 A C P 1 . b. A B C. c. P 2 D A P 3 . d. P 1 C D P 2 .
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Figure 8-5 5) Refer to Figure 8-5 . Without the tax, producer surplus in this market would be a. $1500. b. $2400. c. $3000. d. $3600. e. $4000. ANS: B PTS: 1 DIF: Challenging REF: 168 6) Refer to Figure 8-5 . Without the tax, total surplus in this market would be a. $2400. b. $3000. c. $3600. d. $4200. e. $6000. 7) Refer to Figure 8-5 . If the tax is imposed on the buyer, producer surplus would be a. $600. b. $900. c. $1200. d. $1500. e. $3000. 8) Refer to Figure 8-5 . If the tax is imposed on the seller, producer surplus would be a. $600. b. $900. c. $1200. d. $1500. e. $3000. 9) Refer to Figure 8-5 . When the tax is placed on this good, the quantity sold will a. stay at 600 and buyers will still pay $10.
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b. fall to 300, but buyers will still pay $10. c. stay at 600, but buyers will now pay $16. d. fall to 300, and buyers will now pay $16. 10) Refer to Figure 8-5 . If the government imposes the tax in this market, tax revenue will be a. $600. b. $900. c. $1500. d. $3000. 11) Refer to Figure 8-5 . The amount of the tax placed on this product is a. $4. b. $6. c. $8. d. $10. 12) Refer to Figure 8-5 . Total surplus with a tax imposed in this market would be a. $1500. b. $3600. c. $4500. d. $6000. e. None of the above is correct. 13) Refer to Figure 8-5 . If the tax is imposed on the buyer, total surplus in this market would be a. $1500. b. $3600. c. $4500. d. $6000. e. None of the above is correct. 14) Refer to Figure 8-5 . If the tax is imposed on the seller, total surplus in this market would be a. $1500.
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Quiz%2006%20-%20solutions - Econ*1050 Introductory...

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