QUESTION 12 Figure à P" p Price S K L 3: M ********* B Supply Demand Quantity Refer to Figure. Assume that the government imposes a tax of P-P". The area measured by L+Y represents the O a. deadweight loss due to the tax. O b. total surplus before the tax. O c. loss in consumer surplus due to the tax. O d. loss in producer surplus due to the tax. QUESTION 13 Which one of the following combinations will have the highest deadweight loss? O a. The market that has inelastic supply and inelastic demand. O b. The market that has elastic supply and elastic demand. Oc The market that has elastic supply and inelastic demand. Od. The market that has inelastic supply and elastic demand.

QUESTION 12 Figure à P" p Price S K L 3: M ********* B Supply Demand Quantity Refer to Figure. Assume that the government imposes a tax of P-P". The area measured by L+Y represents the O a. deadweight loss due to the tax. O b. total surplus before the tax. O c. loss in consumer surplus due to the tax. O d. loss in producer surplus due to the tax. QUESTION 13 Which one of the following combinations will have the highest deadweight loss? O a. The market that has inelastic supply and inelastic demand. O b. The market that has elastic supply and elastic demand. Oc The market that has elastic supply and inelastic demand. Od. The market that has inelastic supply and elastic demand.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 8 Figure 14- 12 10 6 2 10 20 30 40 50 60 70 Refer to Figure. If the government imposed a tax of $6 per unit in this market then which of the following statements would be correct? O a. The burden of tax will fall equally on the buyers and sellers. O b. The burden of tax will fall more on the buyers. O C. The burden of tax will fall more on the sellers. O d. Neither buyer or seller will have to pay the tax. QUESTION 19 Figure 20 Trice 18 16 14 12 10 8 D 2 10 20 30 40 50 60 70 80 quantity Refer to Figure. If the government imposes a price ceiling of $6 on this market, then there will be O a. a shortage of 40 units. O b.no shortage. O C. a shortage of 30 units. o d. a shortage of 20 units.
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Đ F be Figure 6-9 12 11 10 20 ******* ********* ------- 4 8 12 16 30 34 R K Refer to Figure 6-9. A price floor set at O a. $7 will be binding and will result in a surplus of 4 units. O b. $4 will be binding and will result in a shortage of 16 units. O c. $7 will be binding and will result in a surplus of 8 units. O d.$4 will be binding and will result in a shortage of 8 units.
Choose the incorrect statement from the following: tion Select one: O a. Producer surplus is the area between the supply curve and the market price received. O b. Consumer surplus is the difference between the maximum price consumers are willing to pay and the minimum price producer O are willing to accept. Consumer surplus is the difference between consumers' willingness to pay and the actual market price paid. O d. Producer surplus is the price received for a good minus its MC, summed over the quantity sold.
7. Effect of a tax on buyers and sellers Part 2 The following graph shows the daily market for wine. Suppose the government institutes a tax of $10.15 per bottle. This places a wedge between the price buyers pay and the price sellers receive.
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5. Calculating tax incidence Suppose that the local government of Santa Fe decides to institute a tax on seltzer consumers. Before the tax, 20,000 packs of seltzer were sold ever week at a price of $11 per pack. After the tax, 14,000 packs of seltzer are sold every week; consumers pay $14 per pack (including the tax), and producers receive $7 per pack. The amount of the tax on a pack of seltzer is $ burden that falls on producers is $ O True per pack. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. False per pack. Of this amount, the burden that falls on consumers is $ per pack, and the
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The figure below illustrates the effect of an excise tax (per unit tax) imposed on sellers (S means supply and D means demand). What is the value of the tax and how much tax revenue does it generate? Price S+tax $100 $60 $50 50 60 Quantity O a. $100 and $1000. O b. $50 and $3000. Oc. None of the alternatives is correct. O d. $50 and $2500. O e. $100 and $5000.
Price elasticity of demand for gasoline is estimated to be -0.3 in the short run and -1.2 in the long run. A decrease in taxes on gasoline would:O A. raise tax revenue in both the short run and long runO B. ower tax revenue in both the short run and long runO C. lower tax revenue in the short run but raise tax revenue in the long runO D. raise tax revenue in the short run but lower tax revenue in the long run
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QUESTION 8 Figure 14 12 10 8 6 4- 2- 10 20 30 40 50 60 70 Refer to Figure. If the government imposed a tax of $6 per unit in this market then which of the following statements would be correct? O a. The burden of tax will fall equally on the buyers and sellers. O b. The burden of tax will fall more on the buyers. O C. The burden of tax will fall more on the sellers. O d. Neither buyer or seller will have to pay the tax.