ECON-1403 Chapter 8 Study Set

Refer to Figure 8-7. As a result of the tax, consumer surplus decreases by

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

Refer to Figure 8-7. As a result of the tax, buyer effectively pay

$32 for each unit of the good, and sellers effectively receive $16 for each unit of the good.

A tax levied on sellers of a good shifts the

Supply curve upward (or to the left).

Refer to Figure 8-7. Which of the following statements is correct?

The loss of consumer surplus for those buyers of the good who continue to buy it after the tax is imposed is $120.

Refer to Figure 8-7. Suppose a 20th unit of the good were sold by a seller to a buyer. Which of the following statements is correct?

For the 20th unit, the difference between the buyer's value and the seller's cost is less than the tax per unit.

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

consumer surplus before the tax.

When a tax is imposed on a good, the

equilibrium quantity of the good always decreases

Refer to Figure 8-7. Before the tax is imposed, the equilibrium price is

$24, and the equilibrium quantity is 25.

Refer to Figure 8-7. The deadweight loss associated with this tax amounts to

$80, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.

Refer to Figure 8-7. Which of the following statements summarizes the incidence of the tax?

For each unit of the good that is sold, buyers bear one-half of the tax burden, and sellers bear one-half of the tax burden.

Refer to Figure 8-7. As a result of the tax,

the market experiences a deadweight loss of $80.

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

total surplus before the tax