Practice Test 8

Practice Test 8 - Practice Test 8 Multiple Choice Identify...

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Practice Test 8 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. In 1776, the American Revolution was sparked by a. the lack of religious freedom in America. b. anger over British taxes. c. Britain's attempt to control American trade. d. a select few who craved political power. ____ 2. When Ronald Reagan ran for the office of President of the United States, he promised that, if elected, he would work for a. increased taxes on gasoline. b. reduced state sales tax rates. c. reduced Federal sales tax rates. d. reduced Federal income tax rates. ____ 3. During Ronald Reagan's eight years in office a. income tax rates rose. b. income tax rates fell. c. he said, "Read my lips: no new taxes." d. the tax rate of high-income taxpayers rose, while the tax rates of low income taxpayers fell. ____ 4. To analyze economic well-being in an economy it is necessary to use a. demand and supply. b. producer and consumer surplus. c. government spending and tax revenue. d. equilibrium price and quantity. ____ 5. 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. ____ 6. A tax placed on a product causes the price the buyer pays a. and the price the seller receives to be higher. b. and the price the seller receives to be lower. c. to be lower and the price the seller receives to be higher. d. to be higher and the price the seller receives to be lower. ____ 7. If a tax is imposed on a market with elastic demand and inelastic supply, a. buyers will bear most of the burden of the tax. b. sellers will bear most of the burden of the tax. c. the burden of the tax will be shared equally between buyers and sellers. d. it is impossible to determine how the burden of the tax will be shared. ____ 8. 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.
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____ 9. When a tax is placed on the buyers of orange juice, the a. size of the orange juice market is reduced. b. price of orange juice decreases. c. supply of orange juice decreases. d. price of orange juice increases, and the equilibrium quantity of orange juice is unchanged. ____ 10. What is true about the burden of a tax imposed on gasoline?
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Practice Test 8 - Practice Test 8 Multiple Choice Identify...

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