econ test
according to the graph shown, the equilibrium price in the market BEFORE the tax is imposed is $1.00
FALSE -- $5.00
the equilibrium price in the market AFTER the tax is imposed is $1
FALSE -- $6.00
the price buyers will pay AFTER tax is imposed $1
FALSE-- $6.00
the price SELLERS recieve after the tax is imposed is $1
FALSE-- 3.50
If a tax is imposed on a market with inelastic supply and elastic demand, then buyers will bear most burden of the tax
FALSE-- buyers pay majoritty of tax
the initial effect of a tax on the buyers of a good is on the supply of that good
FALSE__ demand of that good
Cost refers to a seller's producer surplus.
False (opportunity cost)
a tax on the buyers of popcorn increases the size of the popcorn market
False- reduces size of popcorn
buyers experience higher prices
consumer surplus must go down
Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the
demand curve is more inelastic than the supply curve
If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase would be 0
false
Total tax revenue received by government can be expressed as T/Q.
false
a seller would be willing to sell only if the price recieved is less than the cost of production
false
if a tax is imposed on the buyer of a product, the tax incidence will fall entirely on the buyer, causing the buyer to pay more
false
is roberta sells a shirt for $30 and her producer surplus from the sale is $21, her cost must be $51
false
the amount of deadweight loss associated with the tax is equal to P3 A C P p1
false
the benefit recieved by the gov't from a tax is meaused by deadweight loss
false
total surplus in a market equals value to buyers- amount paid by buyers
false
total surplus in a market is represented by the total area under the demand curve and above the price
false
The area below a demand curve and above the price measures producer surplus
false (consumer surplus)
a supply curve can be used to measure producer surplus because it reflects the actions of sellers
false (sellers cost)
If demand decreases, the price of a product, as well as producer surplus, increases.
false (surplus decreases)
the amount of the tax imposed in this market is $1
false -- $2.50
the amount of the tax imposed in the market is $1
false -- $3
producer surplus is the area under the supply curve to the left of the amount sold
false -- amount a seller us paid less than cost of production
the benefit recieved by sellers in a market is measured by the supply curve
false -- benefit received by tose gained from governement
a tax imposed on a market with an inelastic demand and elastic supply will cause sellers to pay majority of the tax
false -- buyers pay majority of tax
producer surplus equals equals value to buyers- amount paid by buyers
false- amount received by sellers cost of sellers
willingness to pay measure the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
false- max amount a buyer will pay for a good
at nicks bakery, the cost to make choco cake is $3 per cake. he sells three and recieves a total of $21 worth of producer surplus. Nick sells his cakes for $2
false-- $10 per cake
Donald produces nails at a cost of $200 per ton. If he sells the nails for $500 per ton, his producer surplus per ton is $200 per tone
false-- $300
the price SELLERS recieve after tax is $8
false-- $5
according to the graph, the equilibrium price in the market before the tax is imposed is $8
false-- $6
we can say that the allocation of resources is efficient if producer surplus is maximized
false-- a good is not being produced by sellers w/ the lowest price
when a tax is levied on a good only the quantity of the good sold will change
false-- both price and quantity of the good will change
suppose a tax is imposed on the buyers of a product. the burden of the tax will fall entirely on the buyers
false-- buyers and sellers
to analyze economic well- being in an economy its neccessary to use demand and supply
false-- consumer and producer surplus
out of pocket expenses plus the value of the sellers own resources used in prodcution are considered to the sellers total revenue
false-- cost of production
welfare economics is the study of the well- being of less fourtante
false-- hhow the distribution of resources effcts economic well- being
a tax has a deadweight loss because it induces the gov't to spend more
false-- induces buyers to consume less and sellers to produce less
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-- sellers will bear burden of tax
The marginal seller is the seller who cannot compete with the other sellers in the market
false-- would have the market first if the price were any lower
tax incidence
how the burden tax is shared
sellers experience lower prices
producer surplus must go down
Suppose that a tax is placed on DVDs. If the sellers end up bearing most of the tax burden, this indicates that the
supply curve is more inelastic than the demand curve
a tax placed on a product causes
the buyer pays to be higher and seller recieves to be lower
the term tax incidence refers to
the division of the tax burden between buyers and sellers
in the end, tax incidence depends on
the forces of supply and demand
A demand curve measures a buyer's willingness to pay.
true
Cost is a measure of the seller's willingness to sell.
true
For the most part, a tax burden falls most heavily on the side of the market that is more inelastic.
true
If a tax is levied on the sellers of a product, the demand curve will not change
true
Suppose there is an early freeze in California that reduces the size of the lemon crop. consumer surplus in the market for lemons decreases
true
a governement imposed tax on a market shrinks the size of the market
true
a tax imposed on gasoline, will have buyers and sellers sharing the burden of the tax
true
a tax levied on the supplier of a product shifts the supply curve upward
true
a tax on a good rasies the price buyers pay and lowers the price sellers recieve
true
a tax on golf clubs will the equilibrium market price of golf clubs to increase, and the equilibrium quantity sold to decrease
true
a tax on the sellers of cell phones will reduce the size of the cell phone market
true
a tax placed on the seller of a good raises the price buyers pay and lowers the price sellers recieve
true
a tax placed on the sellers of blueberries increases costs, lowers profit and shifts supple to the left (upward)
true
at the equilibrium price, the good will be purchased by those buyers who value the good more than the price
true
buyers and sellers share the burden of tax
true
consumer surplus equals the value to buyers- amount paid by buyers
true
consumer surplus is a buyers willingness to pay minus the price
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 increase in gov't revenue
true
economic analysis uses consumer and producer surplus to judge the effect of taxes on economic welfare
true
for the most part, all gov't, federal, state, and local, rely on taxes to raise revenue for public uses
true
if a tax is imposed on a market with inelastic demand and elastic supply, buyers will bear most of the burden of the tax
true
if buyers of a product are required to pay a tax, the demand curve for the product will shift downward by exactly the size of the tax
true
in most markets, consumer surplus refelcts economic well- being
true
producer surplus measure the well being of sellers
true
the amount of tax revenue received by the gov't is equal to the area p3 A C P p1
true
the burden of a tax placed on a product depends on the supply and demand of that product
true
the price buyers will pay after the tax is imposed is $8
true
total surplus is equal to producer surplus plus consumer supplies
true
when a good is taxed both buyers and sellers are worse off
true
when a tax is placed on the buyers of milk, the size of the milk market is reduced
true
when a tax is placed on the buyers of orange juice, the size of orange juice market is reduced
true
when a tax is placed on the sellers of a product the size of the market is reduced
true
when analyzing the economic effects of gov't policies, supply and demand are useful tools of analysis
true
when technology improves in the ice cream industry, consumer surplus increases
true
when there us deadweight loss we can be certain that the entire society experiences a loss
true
