Homework Answers
The demand curve shifts to the left
because of high prices due to taxes, there will be decline in the demand
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If the government imposes a tax on buyers as a way of reducing pollution, which curve...
1) Consider a normal market with a downward-sloping demand curve and an upward-sloping supply curve. Which...
1) Consider a normal market with a downward-sloping demand curve and an upward-sloping supply curve. Which of the following cases would definitely result in a decrease in consumer surplus? For each case, assume that the market is initially in equilibrium and that everything else is held constant except for the change described in the case Case 1: The supply curve shifts to the left. Case 2: The supp Case 3: The government imposes a binding price ceiling. Case 4: The...
If the government decreased the restrictions on allowable pollution emission levels, then the supply curve for...
If the government decreased the restrictions on allowable pollution emission levels, then the supply curve for a chemical manufacturer that emits some air pollutants will O a become flatter O b be become steeper O c shift to the right - O d shift to the left QUESTION 4 Producer surplus is measured as the area O a. below the demand curve and above the market price O b.above the demand curve and below the market price O c above...
Suppose that the government imposes a $10 tax on sellers of Humbugs. The pre-tax price of...
Suppose that the government imposes a $10 tax on sellers of Humbugs. The pre-tax price of Humbugs was $50. If, at the original equilibrium price, the elasticity of demand was 2 and the elasticity of supply was 15, which of the following is true? The equilibrium quantity of Humbugs will not change. The full amount of the tax will be paid by buyers. Sellers will pay relatively more of the tax than buyers. Buyers will pay relatively more of the...
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor...
Consider a market in which the government imposes a price ceiling. Assume that neither supply nor demand is perfectly elastic nor perfectly inelastic. Which of the following groups will always gain from a price ceiling? Consumer Producers The government Society as a whole, because total surplus will increase No group will always gain from a price ceiling
201 Does a tax on buyers affect the supply curve? Multiple Choice No, there is change...
201 Does a tax on buyers affect the supply curve? Multiple Choice No, there is change in the quantity supplied, but the supply curve does not move. Yes, it shifts to the left by the amount of the tax. Yes, it shifts up by the amount of the tax. Yes, it shifts to the right by the amount of the tax.
QUESTION 23 Which of the following shifts aggregate demand to the left? a. The price level...
QUESTION 23 Which of the following shifts aggregate demand to the left? a. The price level falls. b. The dollar depreciates for some reason other than a change in the price level. c. Stock prices fall for some reason other than a change in the price level. d. The price level rises. QUESTION 24 Aggregate demand shifts left when the government a. decreases taxes. b. cuts military expenditures. c. creates a new investment tax credit d. None of the above...
Tax Problem: Suppose the demand curve for a good is given by Q D = 10...
Tax Problem:
Suppose the demand curve for a good is given by Q D = 10 - 2P and
the supply curve is given by
Q S = -2 + P.
a) (4 points) Find the equilibrium price and quantity in the
absence of any government intervention.
b) (6 points) Now suppose the government imposes a tax of t = 3.
Find the new equilibrium price at
which the good is sold in the market and the quantity of the...
21. Suppose the government imposes a S9 per unit tax on the production of Good Z....
21. Suppose the government imposes a S9 per unit tax on the production of Good Z. If the demand curve for Good Z is perfectly inelastic and the supply curve is upward-sloping, the price that consumers pay for the good will: A) increase by S9. B) increase by S4.50. C) increase by more than S9.
Which of the following shifts aggregate demand to the left?
Which of the following shifts aggregate demand to the left? a. Interest rates fall. b. Stock prices fall for some reason other than a change in the price level. c. The dollar depreciates for some reason other than a change in the price level. d. The price level rises. Which of the following shifts aggregate demand right? a. both a decrease in the price level and the implementation of an investment tax credit b. a decrease in the price level but not the implementation of an investment...
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely...
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first...
1) Consider a normal market with a downward-sloping demand curve and an upward-sloping supply curve. Which of the following cases would definitely result in a decrease in consumer surplus? For each case, assume that the market is initially in equilibrium and that everything else is held constant except for the change described in the case Case 1: The supply curve shifts to the left. Case 2: The supp Case 3: The government imposes a binding price ceiling. Case 4: The...
If the government decreased the restrictions on allowable pollution emission levels, then the supply curve for a chemical manufacturer that emits some air pollutants will O a become flatter O b be become steeper O c shift to the right - O d shift to the left QUESTION 4 Producer surplus is measured as the area O a. below the demand curve and above the market price O b.above the demand curve and below the market price O c above...
Suppose that the government imposes a $10 tax on sellers of Humbugs. The pre-tax price of Humbugs was $50. If, at the original equilibrium price, the elasticity of demand was 2 and the elasticity of supply was 15, which of the following is true? The equilibrium quantity of Humbugs will not change. The full amount of the tax will be paid by buyers. Sellers will pay relatively more of the tax than buyers. Buyers will pay relatively more of the...
201 Does a tax on buyers affect the supply curve? Multiple Choice No, there is change in the quantity supplied, but the supply curve does not move. Yes, it shifts to the left by the amount of the tax. Yes, it shifts up by the amount of the tax. Yes, it shifts to the right by the amount of the tax.
Tax Problem:
Suppose the demand curve for a good is given by Q D = 10 - 2P and
the supply curve is given by
Q S = -2 + P.
a) (4 points) Find the equilibrium price and quantity in the
absence of any government intervention.
b) (6 points) Now suppose the government imposes a tax of t = 3.
Find the new equilibrium price at
which the good is sold in the market and the quantity of the...
21. Suppose the government imposes a S9 per unit tax on the production of Good Z. If the demand curve for Good Z is perfectly inelastic and the supply curve is upward-sloping, the price that consumers pay for the good will: A) increase by S9. B) increase by S4.50. C) increase by more than S9.
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first...
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