Economics 1021A/B Lecture 11: Taxes

73 views2 pages

cerisegiraffe538

22 Oct 2015

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

mariameelguendou and 38538 others unlocked

ECON 1021A/B Full Course Notes

Verified Note

94 documents

Document Summary

Economics1021 lecture 011 chapter 6 taxes. Taxes: necessary to pay for the things government provides. May be tax on labour (income/payroll) or consumption (tax on good / service) Tax on seller: an increase to cost of the good = decrease in supply (shift to the left) ex: equilibrium with no tax for 350th pack, tax on seller: of shifts the supply curve. Equilibrium quantity shifts decreases million packs a year, price of buyer rises to a pack price received by sellers = to the left to 325. Tax on buyer: lower amount willing to pay sellers = decrease demand (shit to the left) ex: equilibrium is at for 350th pack, tax on buyer: of shifts demand curve to. Equilibrium quantity decreases to million packs a year. Price received by sellers fall to . Price of buyer rises to a pack the right.

Related Questions

1.) An excise tax on a good typically reduces the net price received by the seller. (TRUE/FALSE)

2.) The burden of an excise tax on gasoline falls entirely on consumers of gasoline. (TRUE/FALSE)

3.) Rent controls are one of the few examples of a price floor in market economies. (TRUE/FALSE)

4.) Imposing a price ceiling below the equilibrium price of a good often leads to_____.

A) A greater supply of the good

B) A black market for the good

C) A rightward shift of the supply curve for the good.

D) A leftward shift of the demand curve for the good.

E) All of these

5.) Which of the following is true of price floors and ceilings?

A) Lead to the same price and quantity as in competitive market.

B) Lead to technical efficiency

C) Cause the demand curve to shift left

D) Usually result from government intervention

E) Cause the supply curve to shift right.

6.) Price ceilings often lead to black markets. (TRUE/FALSE)

7.) When minimum wage is above the equilibrium wage what occurs?

A) There will be a shortage of labor

B) There will be no effect on the number of people employed

C) There will be an increase in unemployment rate

D) There will be a decrease in unemployment rate

8.) An excise tax on a good typically reduces the price paid by the consumer (TRUE/FALSE)

9.) If a price ceiling is below the equilibrium price is imposed on a market, it will cause the quantity demanded to rise and the quantity supplied to fall. (TRUE/FALSE)

10.) Price floors often lead to black markets. (TRUE/FALSE)

11.) If an excise tax is imposed on restaurant meals what occurs?

A) Fewer meals will be produced and sold

B) More meals will be produced and sold

C) Market price of the meals will fall

D) Government tax revenue will fall.

mauveyellowjacket715

QUESTION 25

What will happen in a market where a binding price floor is removed?

	a.	There will be upward pressure on the prices.
	b.	The price or quantity of the product sold in the legal market will not change.
	c.	There will be downward pressure on the prices.
	d.	The products sold will become scarcer.
	e.	There will be increased pressure to buy and sell the good on the black market.

1.05000 points

QUESTION 26

The local bakery calculates the price elasticity of demand for its cinnamon rolls to be â1.25. This tells them that demand is ________ and price is ________ to the buyer.

	a.	perfectly inelastic; everything
	b.	perfectly elastic; meaningless
	c.	elastic; more important than the quantity
	d.	inelastic; less important than the quantity
	e.	unitary elastic; on the same level as quantity

1.05000 points

QUESTION 27

Marginal product is the change in:

	a.	total output minus the change in input.
	b.	total output divided by the change in input.
	c.	input divided by the change in total output.
	d.	total output plus the change in input.
	e.	total output times the change in input.

1.05000 points

QUESTION 28

The government imposes a tax on each plastic bag sold such that the producer of the plastic bags must pay the tax to the government. In the market for plastic bags, the:

	a.	supply curve shifts to the left.
	b.	supply curve shifts to the right.
	c.	demand curve shifts to the right.
	d.	demand curve shifts to the left.
	e.	the supply curve and the demand curve shift to the left.

1.05000 points

QUESTION 29

Pepsi and Coke are considered substitute goods. Because of this, one would predict that, holding all else constant, if the price of Pepsi increases, we would see:

	a.	the demand curve for Pepsi shift to the right.
	b.	the demand curve for Coke shift to the right.
	c.	no change in the demand for Coke.
	d.	the demand curve for Coke shift to the left.
	e.	the demand curve for Pepsi shift to the left.

1.05000 points

QUESTION 30

The government has identified a situation where the production of a good is creating a negative externality. The government should enact legislation to require firms to internalize the externality:

	a.	as long as there are positive health benefits associated with this policy.
	b.	as long as it will not increase the price of the good being produced.
	c.	in all such cases.
	d.	if the benefits of doing so outweigh the costs.
	e.	as long as it will not create unemployment in this industry.

1.05000 points

QUESTION 31

The out-of-pocket expenses incurred in producing a good are also known as:

	a.	wages and prices.
	b.	fiduciary costs.
	c.	explicit costs.
	d.	capital costs.
	e.	implicit costs.

chocolatemule814

1. Other things remaining the same, a left shift in the supply curve will lead to:

A. a decrease in the equilibrium price and the equilibrium quantity.

B. an increase in the equilibrium price and the equilibrium quantity.

C. an increase in the equilibrium price and a decrease in the equilibrium quantity.

D. a decrease in the equilibrium price and an increase in the equilibrium quantity.

2. Two goods are said to be complements when a fall in the price of one good:

A. leads to a fall in the price of the other good.

B. leads to a left shift in the demand for the other good.

C. leads to a right shift in the demand for the other good.

D. doesn't affect the demand for the other good.

3. In a competitive free market:

A. all exchanges take place involuntarily.

B. there is no provision for the protection of property rights.

C. there is only one seller and many buyers.

D. the government does not impose price controls.

4. Which of the following correctly explains the role of economic agents in a free market?

A. Economic agents allocate goods to those buyers who value the goods the most.

B. Economic agents allocate goods to those buyers who need the goods the most.

C. Economic agents set production quotas for sellers in the market.

D. Economic agents set prices according to the production cost of each good.

5. Which of the following was an effect of the price ceiling placed on gasoline in the U.S. in the 1970s?

A. Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied.

B. Car owners started buying luxury cars that were less fuel-efficient as the price of gas was very low.

C. Those who valued gas the most were able to buy gas under the price ceiling.

D. The inventory of unsold gas increased and gas stations incurred losses.

6. Willingness to accept is:

A. the highest price that a producer is willing to receive to sell an extra unit of a good.

B. always higher than the marginal cost of production.

C. always lower than the marginal cost of production.

D. the lowest price that a producer is willing to receive to sell an extra unit of a good.

7. Assume that the economy is in a recession and consumers are expecting a fall in their income levels. This will cause a(n):

A. right shift in the market demand for all goods.

B. left shift in the market demand for all goods.

C. increase in the total quantity demanded of all goods.

D. decrease in the total quantity demanded of all goods.

8. Which of the following factors is expected to cause the demand curve for coffee to shift to the right?

A. A higher personal tax on the income of all consumers

B. An increase in the supply of coffee due to better weather

C. A higher tax on the sale of tea, a substitute for coffee

D. A fall in the manufacturing cost of coffee

9. If the demand and supply curves for a commodity shift to the right and the shift in demand is greater than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:

A. the same price and quantity.

B. a lower price and quantity.

C. a higher price and a lower quantity.

D. a higher price and quantity.

10. Which of the following statements correctly describes a perfectly competitive market?

A. Haggling and bargaining are commonly observed in a perfectly competitive market.

B. Buyers in a perfectly competitive market pay different prices according to their individual demand.

C. In a perfectly competitive market, individual sellers and buyers can influence the market price.

D.All participants in a perfectly competitive market are price-takers.

viridianhare505

Economics 1021A/B Lecture 11: Taxes

ECON 1021A/B Full Course Notes

Document Summary

Get access

Related Documents

Economics 1021A/B Lecture Notes - Lecture 6: Unemployment Benefits, Avoidance Speech, Production Quota

Economics 1021A/B Lecture Notes - Avoidance Speech, Deadweight Loss, Price Floor

Economics 1021A/B Lecture Notes - Lecture 20: Marginal Utility, Price Ceiling, Indifference Curve

Related Questions