Exam 4: Supply and Demand: Applications and Extensions

Use the figure below to answer the following question(s). Figure 4-7 Refer to Figure 4-7. The supply curve S₁ and the demand curve D indicate initial conditions in the market for gasoline. A $.60-per-gallon excise tax on gasoline is levied. How much revenue does the $.60-per-gallon tax generate for the government?

Use the table below to choose the correct answer. The marginal tax rate on income in the $20,000 to $25,000 range is

Figure 4-23 Refer to Figure 4-23. In which market will the majority of the tax burden fall on the seller?

The burden of a tax will fall primarily on sellers when the

When a government subsidy is granted to the sellers of a product, buyers can end up capturing some of the benefit because

Figure 4-17 Refer to Figure 4-17. If the government imposes a price ceiling in this market at a price of $5.00, the result would be a

Which tax rate measures the percent of your income paid in taxes?

A new law requiring plumbers to pass strict certification tests that reduce the number of plumbers would

Use the figure below to answer the following question(s). Figure 4-13 Refer to Figure 4-13. The supply curve S and the demand curve D₁ indicate initial conditions in the market for flu shots. A new government program is implemented that grants buyers a $25 subsidy when they buy a flu shot, shifting the demand curve from D₁ to D₂. Which of the following is true for this subsidy given the information provided in the exhibit?

If the Federal government enacts a new excise tax of $1.50 per case of soda, which of the following is most likely to occur?

The burden of a tax will fall primarily on buyers when the

Figure 4-23 Refer to Figure 4-23. In which market will the tax burden be most equally divided between the buyer and the seller?

If the government wants to raise tax revenue and shift most of the tax burden to the sellers it would impose a tax on a good with a

Bill the butcher is upset because the government plans to tax beef $.10 a pound. "I hate paying taxes," he says. "Because of this, I'm raising all my beef prices by $.10 a pound. The consumers will bear this burden, not me." Do you see anything wrong with this way of thinking? Explain.

Figure 4-22 Refer to Figure 4-22. The effective price sellers receive after the tax is imposed is

A progressive tax

The marginal tax rate is defined as

Use the table below to choose the correct answer. The tax schedule shown here is

Other things constant, as the price of a resource increases,

If a $500 tax is placed legally (statutorily) on the buyers of new couches and as a result the price of couches at stores rises by $200, the actual burden of the tax