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Refer to Figure 8-3 . As a result of the tax, consumer surplus decreases by

$160, producer surplus decreases by $160, tax revenue is $240, and deadweight loss is $80.

For widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. A tax of $15 per unit is imposed on widgets. The tax reduces the equilibrium quantity in the market by 300 units. The deadweight loss from the tax is

$2,250.

Refer to Figure 8-2. The amount of deadweight loss as a result of the tax is

$2.50.

Refer to Figure 8-2. The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is

$3.

Refer to Figure 8-2. The amount of the tax on each unit of the good is

$5.

If the tax on a good is increased from $1 per unit to $4 per unit, the deadweight loss from the tax increases by a factor of

16.

When a good is taxed,

both buyers and sellers of the good are made worse off

Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by J represents

consumer surplus after the tax.

Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The area measured by I + Y represents the

deadweight loss due to the tax.

If the labor supply curve is very elastic, a tax on labor

has a large deadweight loss.

When a country is on the downward-sloping side of the Laffer curves, a cut in the tax rate will

increase tax revenue and decrease the deadweight loss.

The deadweight loss from a tax per unit of good will be smallest in a market with

inelastic supply and inelastic demand.

Concerning the labor market and taxes on labor, economists disagree about

the size of the deadweight loss of the tax on labor.

Refer to Table 8-1. Suppose the government is considering levying a tax in one or more of the markets described in the table. Which of the markets will allow the government to minimize the deadweight loss(es) from the tax?

Markets B and D only

Refer to Figure 8-2. The loss of consumer surplus associated with some buyers dropping out of the market as a result of the tax is

$1.50.

Refer to Figure 8-2. The amount of tax revenue received by the government is

$5.

Refer to Figure 8-5. Which of the following combinations will maximize the deadweight loss from a tax?

Supply2 and Demand2

Which of the following quantities decrease in response to a tax on a good?

The equilibrium quantity in the market for the good, producer surplus, and the well-being of buyers of the good

Suppose Yolanda needs a dog sitter so that she can travel to her sister's wedding. Yolanda values dog sitting for the weekend at $200. Rebecca is willing to dog sit for Yolanda so long as she receives at least $175. Yolanda and Rebecca agree on a price of $185. Suppose the government imposes a tax of $30 on dog sitting. What is the deadweight loss of the tax?

The lost benefit to Yolanda and Rebecca because after the tax, Rebecca will not dog sit for Yolanda

What happens to the total surplus in a market when the government imposes a tax?

Total surplus decreases.