ECON 213 quiz 5 complete solutions correct answers key

Liberty University ECON 213 quiz 5 complete solutions correct answers key

Two Versions

Question 1 If a tax is imposed on a good with a perfectly elastic demand, the burden of the tax will be borne:

Question 2 In a market where supply and demand are equally elastic, producers and consumers will share equally the burden of a tax because:

Question 3 The difference between the willingness to sell a good and the price a producer receives is also known as:

Question 4 The difference between the price consumers pay and the price sellers receive after a tax is imposed is equal to the:

Question 5 Use the following information to answer the questions that follow. The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. Which areas represent producer surplus before the tax is imposed?

Question 6 Taxes will almost always cause consumer prices to increase. How much they increase depends on:

Question 7 As a tax rate grows larger and larger, eventually:

Question 8 Holding all else constant, when the price of a good increases:

Question 9 At very low tax rates:

Question 10 Excise taxes are taxes that are:

Question 11 Assume that a $0.25/gallon tax on milk causes a loss of $250 million in consumer and producer surplus and creates a deadweight loss of $45 million. From this information, we know that the tax revenue from the tax is:

Question 12 The difference between the willingness to pay for a good and the amount that is paid to get it is also known as:

Question 13 When a tax is imposed, consumer surplus and producer surplus are reallocated to:

Question 14 When looking at a graph, the area above the supply curve and below market price is defined as:

Question 15 The incidence of a tax reflects:

Question 16 A tax on apples would cause the price paid by consumers to __________ and the price received by producers to __________.

Question 17 The cost to society created by distortions in the market as a result of a tax is also known as:

Question 18 The elasticities of supply and demand are important in determining the distribution of tax burden because they:

Question 19 Producers will lose no producer surplus due to a tax if supply in their market is perfectly elastic because:

Question 20 Which of the following statements is concerned with equity rather than efficiency?

Version 2

Question 1 Consumers will lose no consumer surplus due to a tax if:

Question 2 A tax on apples would cause consumers to suffer because:

Question 3 Holding all else constant, when the price of a good increases:

Question 4 Producer surplus is depicted by the area:

Question 5 The deadweight loss from a tax is likely to be greater with a good that has:

Question 6 In a market where supply and demand are both somewhat elastic, but supply is more elastic than demand, producers will bear less of the burden of a tax because:

Question 7 Use the following information to answer the questions that follow. The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. What is the amount of the tax, as measured along the y axis?

Question 8 Compared to consumers, producers will lose the lesser amount of surplus from a tax if:

Question 9 When a tax is imposed on some good, what usually happens to consumer and producer surplus?

Question 10 A tax that is applied to one specific good or service is a(n):

Question 11 Consumers will lose no consumer surplus due to a tax if demand in their market is perfectly elastic because:

Question 12 When a tax is imposed on some good, what happens to the amount of the good bought and sold?

Question 13 Use the following information to answer the questions that follow. The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, PC is the price that consumers pay, and PS is the price that producers receive. QT units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. Which areas represent the revenue collected from this tax?

Question 14 Consumer surplus plus producer surplus equals:

Question 15 Social welfare is measured as the sum of:

Question 16 In most cases, taxes reduce economic efficiency because:

Question 17 Which of the following statements is concerned with equity rather than efficiency?

Question 18 If a tax is imposed on a good where both supply and demand are somewhat elastic, but supply is more elastic than demand, the burden of the tax will be borne:

Question 19 The cost to society created by distortions in the market as a result of a tax is also known as:

Question 20 Of the following items, which is (are) most important in determining the distribution of tax burden?

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