Practice3

Practice3 - Practice Questions for Experiment 3 True-False...

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Practice Questions for Experiment 3 True-False Questions: Fill in Bubble A for True, Bubble B for False. 1. The real effects of a per-unit sales tax are no different whether the tax is collected from sellers or from buyers. (True) 2. If the per-unit sales tax on a good is increased, the revenue from that tax necessarily increases. (False) 3. The loss to buyers and sellers from a tax is always greater than the revenue raised by the tax. (False) 4. If the supply curve of a good is perfectly inelastic, a tax on sellers of that good does not increase the competitive equilibrium price of the good. (True) Multiple Choice Questions 5. In Brass Monkey, Montana, there is a competitive market for used snowmobiles. In this market, there are 40 demanders willing to pay up to $400, 50 demanders willing to pay up to $350, and 40 demanders willing to pay up to $300. There are 50 suppliers who are willing to sell their snowmobiles at any price of $200 or higher but will not sell for less than that amount. There are 50 suppliers who are willing to sell their snowmobiles at any price above $375 but will not sell for less than that amount. Each demander can buy at most one unit, and each seller can supply at most one unit. In the absence of a sales tax, what would be the competitive equilibrium price P and
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Practice3 - Practice Questions for Experiment 3 True-False...

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