Econ 2

an increase in the size of a tax is most likely to increase tax revenue in a market with

inelastic demand and inelastic supply

a price ceiling will be binding if it is set

below the equilibrium price

Jane pays Chuck $50 to mow her lawn every week. when the government levies a mowing tax of $10 on chuck. He raises his price to $60. jane continues to hire him at the higher price. what is the change in producers surplus. change in the consumer surplus

$0, -$10, $0

suppose the government places a $5 per unit on this good. the consumer surplus after this tax is

$10

the vertical distance between points A and C represents a tax in the market the total surplus with the tax is

$15,000

the gaffer curve illustrates that in some circumstances, the government can reduce a tax on a good and increase the

governments tax revenue

which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay

the imposition if a binding price floor

suppose rebecca needs a dog sitter so that she can travel to her sisters wedding. Rebecca values dog sitting for the weekend at $200. Susan is willing to dog sit for Rebecca so long as she receives at least $175. Rebecca and Susan agree on the price of $185. suppose the government imposes a tax of $30 on dog sitting. the tax has made rebecca and susan worse off by a total of

$25

suppose the government places a $5 per unit tax on this good the amount of deadweight loss resulting from this tax is

$25

suppose a $3 per unit tax is placed on this good. the loss of consumer surplus resulting from this tax

$35 - deadweight loss, after the loss

suppose a $3 per unit tax is placed on this good, the amount of tax revenue collected by the government is

$45

suppose the government places a $5 per unit tax on this good, the amount of the tax revenue is collected by the government is

$50

suppose a $3 per unit tax is placed on this good. the amount of deadweight loss resulting from the tax is

$7.50 - base time height times 1/2

which of the following price floors would be binding in the market

$9

the vertical distance between points A and C represents a tax in the market of a producer surplus as a result of the tax is

$9,000

suppose the government imposes a price floor of $3 on this market, what will be the size of the surplus in this market

0 units

studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

1 to 3 percent

which of the following is not correct? in a 2006 survey of Ph.D economists,

10% would decrease the minimum wage

the US congress first instituted a minimum wage in

1938

suppose the government imposes a $2 tax on this market the buyers will bear a higher share of the tax burden than sellers if the demand is

D2 and the supply is $2

Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. With the tax, the total surplus is

[½ x (P0 - P2) XQ2] + {(P2-P8) X Q2] + [½ X (P8-0) X Q2]

a $1 per unit tax levied on consumers of a good is equivalent to

a $1 per unit tax leveled on producers of the good

the key feature of an oligopolistic market is that

a small number of firms are acting strategically

which of the following observations would be consistent with the imposition of a binding price ceiling on a market? after the price ceiling becomes effective

a smaller quantity of the good is brought and sold

when the government imposes a binding price floor, it causes

a surplus of the good to develop

the incidence of a tax falls more heavily on

all of the above

suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. a $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

between $1 and $2

suppose the demand for macaroni is inelastic, the demand for cigarettes is inelastic and the supply of cigarettes is elastic. if a tax were levied on the sellers of both of these commodities we would expect that the burden go

both taxes would fall more heavily on the buyers than on the sellers

suppose that Q1=4, Q2=7, P1=$6, P2=$8 P3=$10. then when the tax is imposed

consumer surplus decreases by $11

if the government removes a tax on a good, then the price paid by buyers will

decrease and the price received by sellers will increase

if the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would

decrease by less than $500

the vertical distance between points A and C represents a taz in the market the imposition of the tax causes the price received by sellers to

decrease from $600 to $300

a tax on the sellers of coffee will increase the price of coffee paid by buyers

decrease the effective price of coffee received by sellers and decrease the equilibrium quantity of coffee

a tax imposed on the sellers of a good will lower the

effective price received by sellers and lower the equilibrium quantity

neither a shift of the demand curve nor a shift of the supply curve is shown on the figure. however, we know that when a tax is imposed

either the demand curve or the supply curve will shift

as the number of firms in an oligopoly grows large, the industry approaches a level that is ______ the competitive level and _____ the monopoly level

equal to, more than

the prisoners dilemma is two person game illustrating that

even if a cooperation is better than the Nash equilibrium each person might have an incentive not to cooperate

a minimum wage that is set below a markets equilibrium wage will

have no impact for employment

if the government removes a tax on a good then the quantity of the good sold will

increase

if the government levies a $1,000 tax per boat on sellers of boats, then the price paid by buyers of boat would

increase by less than $1,000

in a market with a binding price ceiling, an increase in the ceiling will ______ the quantity supplied, ______ the quantity demanded and reduce the _______

increase, decrease, shortage

peanut butter has an upward sloping supply curve and a downward sloping demand curve. if a 10 cent per pound tax is increased to 15 cents, the governments tax revenue

increases by less than 50 percent and may even decline

Eggs have a supply curve that is linear and upward sloping and demand curve that is linear and downward sloping. if a 2 cent per egg tax is increased to 3 cents, the deadweight loss of the tax

increases by more than 50 percent

a tax burden falls more heavily on the side of the market that

is more inelastic

the tax burden will fall most heavily on sellers of the good when the demand curve

is relatively flat, and the supply curve is relatively steep

Kate is a personal trainer whose client william pays $80 per hour long session. william values this service at $100 per hour. while the opportunity cost of Kates time is $75 per hour. the government places a tax of $10 per hour on a personal trainers after the tax what is likely to happen in the market for personal training

kate and william will agree to a new price somewhere between $85 and $100

if an oligopolistic industry organizes itself as a cooperative cartel, it will produce a quantity of output that is ______ the cooperative level and ________ the monopoly level

less than, equal to

if an oligopoly does not cooperate and each firm chooses its own quantity, the industry will produce a quantity of output that is ______ the competitive level and _______ the monopoly level

less than, more than

the size of a tax increases tax revenue

may increase may decrease or may remain the same

when a tax is placed on the sellers of a product, buyers pay

more, and sellers receive less than they did before the tax

suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. the price that buyers pay is

p2

in which market will the majority of the tax burden fall on buyers

panel B because the demand is most inelastic

the anti trust laws aim to

prevent firms from acting in ways that reduce competition

a tax imposed on the sellers of a good will raise the

price paid by buyers and lower the equilibrium quantity

if a nonbinding price ceiling is imposed on a market, then the

quantity sold in the market will stay the same

a tax imposed on the sellers of a good will

raise the price buyers pay and lower the effective price sellers receive

if a tax is imposed on a market with inelastic supply and elastic demand then

sellers will bear most of the burden of the tax

if a policymaker wants to raise revenue by taxing goods while minimizing the deadweight losses, he should look for goods with ______ elasticities of demand and _______ elastics of supply

small, small

when a good taxed, the burden of the tax falls mainly on consumers if

supply is elastic, and demand is inelastic

a minium wage that is set above a markets equilibrium wage will result in an excess

supply of labor, that is unemployed

suppose sellers of a perfume are required to send $1 to the government for every bottle of perfume they sell. further, suppose this tax causes the price paid by buyers of perfume to rise by $.6 per bottle. which of the statements are true

the effective price received by sellers is $.4 per bottle less than it was before the tax

if a price ceiling is non binding then

the equilibrium price is below the price ceiling

a tax on a good has a deadweight loss if

the reduction in consumer and producer surplus is greater than the tax revenue

which of the following would increase quantity supplied, increase quantity demanded, and decrease the price that consumers pay

the repeal of a tax levied on producers

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

the response of buyers and sellers to a change in the price of bananas os strong

if a price ceiling is not binding then

there will be no effect on the market price or quantity sold

Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. With the tax, the consumer surplus is

½ X (P0-P2) X Q2

Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. The deadweight loss of tax is

½ X (P2 - P8) X (Q5-Q2)