Micro Quiz 12 Taxes

The above figure shows the market for buckets of golf balls at the driving range. A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S0 to S1. The total tax revenue is equal to

$1,200.

In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the tax revenue collected by the government equals

$240.

The above figure shows the market for buckets of golf balls at the driving range. A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S0 to S1. The amount of this tax is ________ per bucket of golf balls.

$3

The figure above shows the market for tires. The figure shows that the government has imposed a tax of ________ per tire.

$30

The figure above shows the market for tires. The government has imposed a tax on tires, and the buyers pay ________ of the tax.

$30***

The figure above shows the market for tires. The government has imposed a tax on tires, and the sellers pay ________ of the tax.

$30***

The figure above shows the market for tires. According to the figure, the government collects ________ per month in total tax revenue.

$600 million

The above figure shows the market for gourmet ice cream. In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S0 to S1. The quantity of ice cream consumed before the tax is ________ gallons and the quantity consumed after the tax is ________ gallons.

250,000; 200,000

In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the

Both answers buyers and sellers equally share the incidence of the tax and shaded area is the deadweight loss from the tax are correct.

Neither the demand nor the supply of gasoline is perfectly elastic or inelastic. When the government increases the federal tax on gasoline, the effect on buyers is that the price they pay

Rises

Sales taxes are usually collected from sellers, who view the tax as

an additional cost of selling the good.

For a given supply elasticity, the more inelastic the demand for a good, the larger the share of the tax paid by the

buyers.

Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic. If the federal government eliminated the 18.4 cents per gallon gasoline tax, the price paid by buyers would

decrease by less than 18.4 cents.

A sales tax imposed on sellers of a good

decreases the supply and shifts the supply curve leftward.

The figure above shows the market for tires. According to the figure, the price elasticity of demand is ________ the price elasticity of supply.

greater than

If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is

paid fully by buyers.

The above figure shows the market for gourmet ice cream. In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S0 to S1. The tax incidence is

split equally between consumers and producers, each paying $1 per gallon.

To calculate the revenue government receives when a tax is imposed on a good, multiply the

tax by the after-tax quantity.

The above figure shows the market for buckets of golf balls at the driving range. A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S0 to S1. The tax incidence is

that buyers pay $2 per bucket and sellers pay $1 per bucket.

The demand for insulin is quite inelastic. The demand for Pepsi is quite elastic. Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi. If a $0.20 tax was imposed on each of these goods (holding everything else constant), which consumers would pay more of the tax?

the insulin consumers