Econ chapter 8

Why is taxing food a bad way to raise revenue from an equity standpoint?

Because poorer people spend a higher proportion of their income on food

Why is taxing food less inefficient than taxingbpther things?

Because there wont be tio much DWL

A tax that has no DWL can't raise any revenue for the government

False

A tax that raises no revenue for the government can't have any DWL

False

Consumer surplus rises it total consumer spending falls?

False

The government can raise its taxes by increasing the per-unit tax on cigarettes?

False

The laffer curve illustrates that, in sim circumstances, the government can reduce a tax on a good and increase the...

Government's tax revenue

If a 10 cent per pound tax is increased to 15 cents, the government's tax revenue...

Increases by less than 50 % and may even decline

If a 2 cent per egg tax increases to 3 cents, the DWL of the tax...

Increases by more than 50 %

DWL is likely to be smaller or larger in the long runs compared to the short run

Larger

The tax revenue is likely to be smaller or larger in the long run than I the short run

Smaller

The burden of tax will fall more heavily on..

The inelastic curve

A tax on a good has a deadweight loss if...

The reductiob in consumer and producer surplus is greater than the tax revenue

As a result of the tax, the price paid by consumers rises and ...

Total consumers spending falls as long as demand is elastic

All parties could be made better off with this transfer than they were with a tax

True