On a supply & demand graph, total surplus is represented by the area

under the demand curve and above the supply curve

The burden of a tax...

depends on the elasticity of supply and demand

what would happen on a supply and demand curve if a tax was put on materials?

the supply curve would shift to the left

A dead weight loss is defined as:

Loss of welfare by a group, not offset by a gain to another

On a supply & demand graph, total producer surplus is the area

below the price and above the supply curve

Which of the following statements would NOT match the shown shift in the supply or demand curve

The shift resulted from an increase in production costs

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Welfare Economics

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Questions 16

Answers

1
After the tax what is the price that sellers receive?
5
2
4
3
2
The excess burden, or deadweight loss, of a tax comes about because
tax lowers quantity exchanged & some sales don't take place
both producers and consumers are hurt by the tax
the consumers pay a higher price than they would w/o the tax
all of the above
3
Calculate the dead weight loss.
50
100
200
300
4
Refer to figure, $3 tax is imposed, what is buyer price after tax
5
7
3
4
5
Calculate the dead weight loss.
100
300
50
200
6
On a supply & demand graph, total surplus is represented by the area
above the supply curve and up to the price
under the supply curve and up to the price
under the demand curve and above the price
under the demand curve and above the supply curve
7
The burden of a tax...
falls mostly on sellers.
is shared evenly by buyers and sellers.
depends on the elasticity of supply and demand
falls mostly on buyers
8
what would happen on a supply and demand curve if a tax was put on materials?
the demand curve would shift to the left
the supply curve would shift to the right
the supply curve would shift to the left
the demand curve would shift to the right
9
Who will share a larger burden of indirect tax when the tax charges on an elasticproduct?
Producers
Government
Consumers
Rich Iris
10
A dead weight loss is defined as:
Loss of welfare by a group, not offset by a gain to another
That triangle thingy
Loss of consumer or producer surplus, of gain to another
Loss of welfare by one group, offset by a gain to another
11
On a supply & demand graph, total producer surplus is the area
below the price and above the supply curve
between the supply and demand curves
under the demand curve and above the price
under the supply curve
12
Refer to figure, $3 tax is imposed, what is seller price after tax
7
4
5
3
13
Identify Dead Weight Loss due to Tax
Q2-Q1
DE
CD
FE
14
How much is the tax revenue?
120
240
360
540
15
Refer to figure, $3 tax is imposed, dead weight loss is
4
7
5
3
16
Which of the following statements would NOT match the shown shift in the supply or demand curve
Consumer surplus increases
Quantity increases
The shift resulted from an increase in production costs
Price decreases

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