econ test

according to the graph shown, the equilibrium price in the market BEFORE the tax is imposed is $1.00

FALSE -- $5.00

the equilibrium price in the market AFTER the tax is imposed is $1

FALSE -- $6.00

the price buyers will pay AFTER tax is imposed $1

FALSE-- $6.00

the price SELLERS recieve after the tax is imposed is $1

FALSE-- 3.50

If a tax is imposed on a market with inelastic supply and elastic demand, then buyers will bear most burden of the tax

FALSE-- buyers pay majoritty of tax

the initial effect of a tax on the buyers of a good is on the supply of that good

FALSE__ demand of that good

Cost refers to a seller's producer surplus.

False (opportunity cost)

a tax on the buyers of popcorn increases the size of the popcorn market

False- reduces size of popcorn

buyers experience higher prices

consumer surplus must go down

Suppose that a tax is placed on books. If the buyers pay the majority of the tax, then we know that the

demand curve is more inelastic than the supply curve

If the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase would be 0

false

Total tax revenue received by government can be expressed as T/Q.

false

a seller would be willing to sell only if the price recieved is less than the cost of production

false

if a tax is imposed on the buyer of a product, the tax incidence will fall entirely on the buyer, causing the buyer to pay more

false

is roberta sells a shirt for $30 and her producer surplus from the sale is $21, her cost must be $51

false

the amount of deadweight loss associated with the tax is equal to P3 A C P p1

false

the benefit recieved by the gov't from a tax is meaused by deadweight loss

false

total surplus in a market equals value to buyers- amount paid by buyers

false

total surplus in a market is represented by the total area under the demand curve and above the price

false

The area below a demand curve and above the price measures producer surplus

false (consumer surplus)

a supply curve can be used to measure producer surplus because it reflects the actions of sellers

false (sellers cost)

If demand decreases, the price of a product, as well as producer surplus, increases.

false (surplus decreases)

the amount of the tax imposed in this market is $1

false -- $2.50

the amount of the tax imposed in the market is $1

false -- $3

producer surplus is the area under the supply curve to the left of the amount sold

false -- amount a seller us paid less than cost of production

the benefit recieved by sellers in a market is measured by the supply curve

false -- benefit received by tose gained from governement

a tax imposed on a market with an inelastic demand and elastic supply will cause sellers to pay majority of the tax

false -- buyers pay majority of tax

producer surplus equals equals value to buyers- amount paid by buyers

false- amount received by sellers cost of sellers

willingness to pay measure the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

false- max amount a buyer will pay for a good

at nicks bakery, the cost to make choco cake is $3 per cake. he sells three and recieves a total of $21 worth of producer surplus. Nick sells his cakes for $2

false-- $10 per cake

Donald produces nails at a cost of $200 per ton. If he sells the nails for $500 per ton, his producer surplus per ton is $200 per tone

false-- $300

the price SELLERS recieve after tax is $8

false-- $5

according to the graph, the equilibrium price in the market before the tax is imposed is $8

false-- $6

we can say that the allocation of resources is efficient if producer surplus is maximized

false-- a good is not being produced by sellers w/ the lowest price

when a tax is levied on a good only the quantity of the good sold will change

false-- both price and quantity of the good will change

suppose a tax is imposed on the buyers of a product. the burden of the tax will fall entirely on the buyers

false-- buyers and sellers

to analyze economic well- being in an economy its neccessary to use demand and supply

false-- consumer and producer surplus

out of pocket expenses plus the value of the sellers own resources used in prodcution are considered to the sellers total revenue

false-- cost of production

welfare economics is the study of the well- being of less fourtante

false-- hhow the distribution of resources effcts economic well- being

a tax has a deadweight loss because it induces the gov't to spend more

false-- induces buyers to consume less and sellers to produce less

if a tax is imposed on a market with elastic demand and inelastic supply, buyers will bear most of the burden of the tax

false-- sellers will bear burden of tax

The marginal seller is the seller who cannot compete with the other sellers in the market

false-- would have the market first if the price were any lower

tax incidence

how the burden tax is shared

sellers experience lower prices

producer surplus must go down

Suppose that a tax is placed on DVDs. If the sellers end up bearing most of the tax burden, this indicates that the

supply curve is more inelastic than the demand curve

a tax placed on a product causes

the buyer pays to be higher and seller recieves to be lower

the term tax incidence refers to

the division of the tax burden between buyers and sellers

in the end, tax incidence depends on

the forces of supply and demand

A demand curve measures a buyer's willingness to pay.

true

Cost is a measure of the seller's willingness to sell.

true

For the most part, a tax burden falls most heavily on the side of the market that is more inelastic.

true

If a tax is levied on the sellers of a product, the demand curve will not change

true

Suppose there is an early freeze in California that reduces the size of the lemon crop. consumer surplus in the market for lemons decreases

true

a governement imposed tax on a market shrinks the size of the market

true

a tax imposed on gasoline, will have buyers and sellers sharing the burden of the tax

true

a tax levied on the supplier of a product shifts the supply curve upward

true

a tax on a good rasies the price buyers pay and lowers the price sellers recieve

true

a tax on golf clubs will the equilibrium market price of golf clubs to increase, and the equilibrium quantity sold to decrease

true

a tax on the sellers of cell phones will reduce the size of the cell phone market

true

a tax placed on the seller of a good raises the price buyers pay and lowers the price sellers recieve

true

a tax placed on the sellers of blueberries increases costs, lowers profit and shifts supple to the left (upward)

true

at the equilibrium price, the good will be purchased by those buyers who value the good more than the price

true

buyers and sellers share the burden of tax

true

consumer surplus equals the value to buyers- amount paid by buyers

true

consumer surplus is a buyers willingness to pay minus the price

true

deadweight loss is the reduction in total surplus that results from a tax

true

deadweight loss measures the loss in a market to buyers and sellers that is not offset by increase in gov't revenue

true

economic analysis uses consumer and producer surplus to judge the effect of taxes on economic welfare

true

for the most part, all gov't, federal, state, and local, rely on taxes to raise revenue for public uses

true

if a tax is imposed on a market with inelastic demand and elastic supply, buyers will bear most of the burden of the tax

true

if buyers of a product are required to pay a tax, the demand curve for the product will shift downward by exactly the size of the tax

true

in most markets, consumer surplus refelcts economic well- being

true

producer surplus measure the well being of sellers

true

the amount of tax revenue received by the gov't is equal to the area p3 A C P p1

true

the burden of a tax placed on a product depends on the supply and demand of that product

true

the price buyers will pay after the tax is imposed is $8

true

total surplus is equal to producer surplus plus consumer supplies

true

when a good is taxed both buyers and sellers are worse off

true

when a tax is placed on the buyers of milk, the size of the milk market is reduced

true

when a tax is placed on the buyers of orange juice, the size of orange juice market is reduced

true

when a tax is placed on the sellers of a product the size of the market is reduced

true

when analyzing the economic effects of gov't policies, supply and demand are useful tools of analysis

true

when technology improves in the ice cream industry, consumer surplus increases

true

when there us deadweight loss we can be certain that the entire society experiences a loss

true