Exam 4: A: Supply and Demand: Applications and Extensions

Suppose an excise tax is imposed on two products X and Y, both of which have identical supply elasticities. The demand for good X is highly elastic, while the demand for good Y is highly inelastic. The deadweight loss (or excess burden) will be

When the government increased its involvement in rescue efforts on Mount McKinley (the tallest peak in North America), the number of mountain climbing deaths

A substantial revision of the income tax code that made business and personal tax returns much easier to complete would tend to cause which of the following changes in the labor market for accountants?

When several hurricanes hit Florida in 2004, a number of local governments imposed price controls that prevented sellers from raising their prices for badly needed products like plywood and generators. In the areas where the controls were imposed, they resulted in

Subsidy programs that provide benefits to well organized interest groups will

The Laffer curve illustrates the concept that

During the Prohibition period (when the production and sale of alcohol was illegal),

Many economists believe a general sales tax (particularly on items such as food) takes a larger proportion of income from low-income households than from high-income households. If this is true, a general sales tax is a

Taxes adversely affect the allocation of resources because

Which of the following examples illustrates a regressive income tax?

Other things constant, a decrease in the demand for computers will

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

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

Economic analysis indicates minimum wage legislation has

Which of the following is the most likely result of an increase in the minimum wage?

A tax tends to

An increase in the number of students graduating with a major in engineering would result in

Use the figure below to answer the following question(s). Figure 4-8 -Refer to Figure 4-8. How much revenue does the $40-per-ton tax generate for the government?

When government imposes price controls in a market,

If a $5,000 property tax is placed legally (statutorily) on the buyers of new automobiles and as a result the price of automobiles at dealerships rises by $2,000, the actual burden of the tax