Economics chapter 8
.If a tax is imposed on a market with elastic demand and inelastic supply, buyers will bear most of the burden of the tax.
false
.Suppose a tax is imposed on the buyers of a product. The burden of the tax will fall entirely on the buyers.
false
.The loss in total surplus resulting from a tax is called a deficit.
false
A tax has a deadweight loss because it induces the government to spend more.
false
A tax imposed on a market with an inelastic demand and an elastic supply will cause sellers to pay the majority of the tax.
false
A tax levied on the buyers of a product shifts the supply curve upward (or to the left).
false
A tax placed on a product causes the price the buyer pays and the price the seller receives to be higher.
false
As the size of a tax increases the deadweight loss from the tax declines.
false
Assume that a tax is levied on a good and that the government uses the revenue to clean up lethal toxic waste that would cause irreparable harm to a large number of people. In this case, there would be a decrease in the total economic welfare of society.
false
If the size of a tax increases, tax revenue will increase.
false
The Laffer curve relates income tax rates to total income taxes collected.
false
The benefit received by buyers in the market is measured by the demand curve.
false
The benefit received by sellers in a market is measured by the supply curve
false
The benefit received by the government from a tax is measured by deadweight loss.
false
To analyze economic wellbeing in an economy it is necessary to use demand and supply.
false
Total surplus with a tax is equal to consumer surplus and producer surplus.
false
Total tax revenue received by government can be expressed as T/Q.
false
When a tax is levied on a good only the quantity of the good sold will change.
false
.A tax levied on the supplier of a product shifts the supply curve upward (or to the left). `
true
A tax imposed on gasoline, will have buyers and sellers sharing the burden of the tax
true
A tax on a good raises the price buyers pay and lowers the price sellers receive
true
As the tax rate rises, tax revenue rises for a while, but eventually begins to fall; deadweight loss continually rises, this is true for most markets.
true
Assume that the supply of gasoline is relatively inelastic and the supply of wheat is relatively elastic. A tax levied on wheat will cause the loss of producer surplus to be relatively large.
true
Deadweight loss is the reduction in total surplus that results from a tax.
true
Deadweight loss measures the loss in a market to buyers and sellers that is not offset by an increase in government revenue.
true
Economic analysis uses consumer and producer surplus to judge the effect of taxes on economic welfare.
true
The benefit from a tax is measured by the benefit received by those people who gain from government's expenditure of the tax revenue.
true
When a good is taxed both buyers and sellers are worse off.
true
When a tax is placed on the buyers of orange juice, the size of the orange juice market is reduced.
true
