Microeconomics Chapter 8 Quiz

the amount of deadweight loss as a result of the tax is

$2.5

the vertical distance between points E and F represents a tax in the market. The per-unit burden of the tax on buyers is

$3

producer surplus without the tax is

$4, and producer surplus with the tax is $1

the amount of tax on each unit of the good is

$5

consumer surplus without the tax is

$6, and consumer surplus with the tax is $1.5

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 the government can be expressed as

T x Q

graph (a) and graph (b) each illustrate a $4 tax placed on a market. in comparison to graph (a), graph (b) illustrates which of the following statements?

When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.

suppose the government imposes a tax on cheese. the deadweight loss from this tax will likely be greater in the

eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year

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

inelastic supply and inelastic demand

the social security tax is a tax on

labor

the size of a tax and the deadweight loss that results from the tax are

positively related

when a tax is levied on a good, the buyers and sellers of the good share the burden,

regardless of how the tax is levied

as a result of the tax,

the market experiences a deadweight loss of $80

total surplus without the tax is

$10, and total surplus with the tax is $7.5