econ ch 8 study questions
If there is no tax placed on the product in this market, total surplus is the area
A+B+C+D+E+F
If a tax is placed on the product in this market, tax revenue paid by the sellers is the area
C
If a tax is placed on the product in this market, producer surplus is the area
D
If a tax is placed on the product in this market, deadweight loss is the area
E+F
Deadweight loss is greatest when
both supply and demand are relatively elastic
A tax on gasoline is likely to
cause a greater deadweight loss in the long run when compared to the short run.
If a tax is placed on the product in this market, consumer surplus is the area
A
If a tax is placed on the product in this market, total surplus is the area
A + B + C + D
If there is no tax placed on the product in this market, consumer surplus is the area
A + B + E.
If a tax is placed on the product in this market, tax revenue paid by the buyers is the area
B
If there is no tax placed on the product in this market, producer surplus is the area
C + D + F
Which of the following is true with regard to the burden of the tax in Exhibit 4?
The sellers pay a larger portion of the tax because supply is more inelastic than demand.
Which of the following would likely cause the greatest deadweight loss?
a tax on cruise line tickets
