Figure 316 which of the following statements is true

This preview shows page 17 - 19 out of 33 pages.

(Figure 3.16) Which of the following statements is TRUE?I. A $3-per-unit tax placed on buyers raises the price buyers pay to $6. II. A $3-per-unit tax placed on sellers raises the price buyers pay to $6. III. With a $3-per-unit tax placed on sellers, the share of the tax paid by buyers is 67%. I, II, and III (True Answer )Correct I and III Incorrect II and III Incorrect I only Incorrect
114 The demand and supply curve for a product are QD50 0.5Pand QS= 2.5P+ 5, where P is the price per unit and Q measures millions of units. If the government places a $1.20-per-unit tax on buyers, what is the size of the deadweight loss? =
115 Suppose the government is considering changing payroll taxes. Which of the following tax laws would be most beneficial for workers (e.g., provide the highest after-tax wage)?
116 The price elasticity of demand is 1.25, and the share of the tax borne by consumers is 0.80. What is the price elasticity of supply?
At the equilibrium price of $10, the elasticity of demand and supply are 0.9 and 1.10. If the government institutes a $1-per-unit tax, what price will sellers receive and consumers pay after the tax? Sellers will receive $9.55, and consumers will pay $10.55. (True Answer )Correct Sellers will receive $10.25, and consumers will pay $11.25. Incorrect Sellers will receive $9.80, and consumers will pay $10.80. Incorrect Sellers will receive $9.75, and consumers will pay $10.75. Incorrect
118 Figure 3.17 Reference: Ref 3-17 (Figure 3.17) Figure 3.17 shows the effect of a government subsidy. Which of the following statements is TRUE?I. The area of the deadweight loss is C + D + E + G + H + I.II. The subsidy causes producer surplus to increase from area F + G + HF + G + H + I. III. The government's cost of the subsidy is area B + C + D + E + F + G + IV. With the subsidy, consumer surplus is area A + B + C + D + E.I and IV Incorrect I and III Incorrect III only. (to

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture