Exam 8: Application the Cost of Taxation: The Determinants of the Deadweight Loss

Suppose the government places a per-unit tax on a good.The smaller the price elasticities of demand and supply for the good,the

Which of the following is a tax on labor?

Which of the following statements is correct regarding the imposition of a tax on gasoline?

Figure 8-18 -Refer to Figure 8-18.Suppose the government imposes a $1 tax in each of the four markets represented by supply curves S1,S2,S3,and S4.The deadweight will be the smallest in the market represented by

Consider a good to which a per-unit tax applies.The size of the deadweight that results from the tax is smaller,the

The size of a tax and the deadweight loss that results from the tax are

Which of the following is not correct?

Suppose a tax is imposed on bananas.In which of the following cases will the tax cause the equilibrium quantity of bananas to shrink by the largest amount?

When a tax is imposed on a good for which the demand is relatively elastic and the supply is relatively inelastic,

The price elasticities of supply and demand affect

When a good is taxed,the burden of the tax

Concerning the labor market and taxes on labor,economists disagree about

Assume the price of gasoline is $2.00 per gallon,and the equilibrium quantity of gasoline is 10 million gallons per day with no tax on gasoline.Starting from this initial situation,which of the following scenarios would result in the largest deadweight loss?

Economists generally agree that the most important tax in the U.S.economy is the

If the labor supply curve is very elastic,a tax on labor

The amount of deadweight loss that results from a tax of a given size is determined by

Suppose a tax is imposed on baseball bats.In which of the following cases will the tax cause the equilibrium quantity of baseball bats to shrink by the smallest amount?

Taxes on labor have the effect of encouraging

Figure 8-15 -Refer to Figure 8-15.Panel (a)and Panel (b)each illustrate a $4 tax placed on a market.In comparison to Panel (a),Panel (b)illustrates which of the following statements?

Taxes on labor encourage all of the following except