ch 8. Micro

A tax levied on the sellers of a good shifts the

a. supply curve upward (or to the left)..

When motorcycles are taxed and sellers of motorcycles are required to pay the tax to the government,

a. the quantity of motorcycles bought and sold in the market is reduced.

The decrease in total surplus that results from a market distortion, such as a tax, is called a

c. deadweight loss.

When a good is taxed,

a. both buyers and sellers of the good are made worse off.

. A $2 tax per gallon of paint placed on the buyers of paint will shift the demand curve

a. downward by exactly $2

. When a tax is levied on a good

a. government collects revenues which might justify the loss in total welfare. b. there is a decrease in the quantity of the good bought and sold in the market. c. a wedge is placed between the price buyers pay and the price sellers effectively receive. d. All of the above are correct.

. For the purpose of analyzing the gains and losses from a tax on a good, we use tax revenue as a direct measure of the

a. government's benefit from the tax

A tax placed on buyers of tuxedoes shifts the

b. demand curve for tuxedoes downward, decreasing the price received by sellers of tuxedoes and causing the quantity of tuxedoes to decrease.

A tax on a good

b. raises the price that buyers effectively pay and lowers the price that sellers effectively receive

To measure the gains and losses from a tax on a good, economists use the tools of

b. welfare economics

If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as

c. TxQ

It does not matter whether a tax is levied on the buyers or the sellers of a good because

c. buyers and sellers will share the burden of the tax

A tax levied on the buyers of a good shifts the

c. demand curve downward (or to the left).

. When a tax is placed on the buyers of a product, a result is that buyers effectively pay

c. more than before the tax, and sellers effectively receive less than before the tax.

The government's benefit from a tax can be measured by

c. tax revenue.

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

c.Total surplus decreases.

If a tax shifts the demand curve upward (or to the right), we can infer that the tax was levied on

d. We cannot infer anything because the shift described is not consistent with a tax.

Suppose a tax is imposed on the sellers of fast-food French fries. The burden of the tax will

d. be shared by the buyers and sellers of fast-food French fries but not necessarily equally.

A tax affects

d. buyers, sellers, and the government.

When a tax is imposed on a good, the

d. equilibrium quantity of the good always decreases.