GOV programs may be less costly if they are funded by taxes on:

Goods where supply is inelastic & create small DWL

Taxes imposed on the consumption have which of the following effects on the market?

Demand decreases by the amount of the tax

Which of the following describes a policy approach suggested by the Laffer curve?

Lowering taxes can help raise Tax Rev

Taxes imposed on production have which of the following effects on the market for the good

Supply decreases by amount of tax

If labor supply is elastic, then the tax on labor:

Discourages participation in the labor market

Which of the following would NOT be consistent with "supply side" economics?

Higher taxes will result in more Tax Rev for GOV

Taxes have which of the following effects on a competitive market?

Quantity falls below the efficient, equilibrium quantity

If the labor supply is inelastic, then the tax on labor:

Causes little change in the market behavior of workers

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The Cost of Taxation

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Questions 10

Answers

1
What do we call the area of lost producer and consumer surplus due to a market distortion?
Deadweight Loss
Efficiency
Tax Rev
Externality
2
GOV programs may be less costly if they are funded by taxes on:
Luxury Goods
Goods where S&D are more elastic
Goods where supply is elastic & create small DWL
Goods where supply is inelastic & create small DWL
3
Taxes imposed on the consumption have which of the following effects on the market?
Supply decreases by the amount of the tax
The tax is paid entirely by the consumer
Supply increases by the amount of the tax
Demand decreases by the amount of the tax
4
Which of the following describes a policy approach suggested by the Laffer curve?
Taxes are higher in European nations
Smaller GOVs are dependent on Tariffs to fund themselves
Lowering taxes can help raise Tax Rev
Raising taxes can help raise Tax Rev
5
The more elastic supply and demand, the:
Greater the DWL
More equitably the DWL is shared by buyers & sellers
Greater the opportunity for raising tax rev
Smaller the DWL
6
Taxes imposed on production have which of the following effects on the market for the good
Supply decreases by amount of tax
Sellers pay the entire tax
Supply increases by amount of tax
Demand increases by amount of tax
7
If labor supply is elastic, then the tax on labor:
Encourages participation in the labor market
Maximizes tax revenue
Discourages participation in the labor market
Falls mostly on the workers
8
Which of the following would NOT be consistent with "supply side" economics?
Regulations tend to discourage businesses from expanding
Higher taxes will result in more Tax Rev for GOV
Reducing taxes could provide incentives for working
Tax rates can influence people's behavior
9
Taxes have which of the following effects on a competitive market?
Quantity falls below the efficient, equilibrium quantity
Consumers and producers split the tax burden equally
Tax rev = amount of lost consumer & producer surplus
Prices rise by the full amount of the tax
10
If the labor supply is inelastic, then the tax on labor:
Creates significant distortions in the market
Causes little change in the market behavior of workers
Causes workers to work less & GOV to collect less Rev
Discourages employers from hiring workers

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