Deck 8: Taxes

Question 1

The demand curve for pizza is downward sloping and the supply curve is upward sloping.If the government imposes a $2 tax on a pizza, ________ the tax.

A)only consumers pay
B)only producers pay
C)both producers and consumers pay part of
D)neither producers nor consumers pay part of
E)the government pays

Answer 1

C

Question 2

Neither the demand nor the supply of sugar is perfectly elastic or inelastic.If the government imposes a 5 percent tax on sugar, the

A)price of sugar buyers pay falls by 5 percent.
B)price of sugar buyers pay increases by less then 5 percent.
C)price of sugar buyers pay does not change.
D)quantity of sugar increases.
E)price of sugar buyers pay rises by 5 percent.

Answer 2

B

Question 3

Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic.If the federal government eliminated the 18.4 cents per gallon gasoline tax, the price paid by buyers would

A)decrease by less than 18.4 cents.
B)decrease by 18.4 cents.
C)decrease by more than 18.4 cents.
D)stay the same.
E)increase by 18.4 cents.

Answer 3

A

Question 4

Tax incidence is the

A)burden buyers have to absorb from a tax on goods and services.
B)burden sellers have to absorb from a tax on goods and services.
C)lost revenue the government endures from goods and services that are not taxed.
D)division of the burden of a tax between the buyer and the seller.
E)deadweight loss created by a tax.

Question 5

In the figure above, suppose that the government imposes a tax of $4 per pizza.Then, the tax revenue collected by the government equals

A)$240.
B)$320.
C)$160.
D)$120.
E)$4.

Question 6

Neither the demand nor the supply of automobiles is perfectly elastic or inelastic.If the government imposes a $1,000 tax on automobiles, then the price of an automobile buyers pay

A)increases by $1,000.
B)increases by less than $1,000.
C)increases by more than $1,000.
D)decreases by $1,000.
E)does not change.

Question 7

If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is

A)split between buyers and sellers but not evenly.
B)paid fully by sellers.
C)paid fully by buyers.
D)split evenly between buyers and sellers.
E)perhaps split between buyers and sellers but it is impossible to determine the incidence without further information.

Question 8

A sales tax imposed on sellers of a good

A)decreases the demand and shifts the demand curve rightward.
B)decreases the supply and shifts the supply curve leftward.
C)decreases both the demand and the supply and shifts both the demand and supply curves leftward.
D)decreases the supply and shifts the supply curve rightward.
E)has no effect on either the demand or the supply.

Question 9

The elasticity of demand for a good is 1 and the elasticity of supply is 0.8.Thus, imposing a tax on the good ________ the price kept by sellers and ________ the price paid by buyers.

A)raises; raises
B)raises; lowers
C)lowers; raises
D)lowers; lowers
E)does not change; raises

Question 10

Imposing a sales tax on sellers of a product has an effect that is similar to which of the following?

A)a decrease in consumers' preferences for the good
B)an increase in the costs of production
C)an increase in demand for the good
D)a decrease in people's willingness to work
E)anything that decreases the demand and shifts the demand curve leftward2

Question 11

Giving in to the demand of protestors, suppose the French government reduces the tax on gasoline by 15 percent.Neither the demand for gasoline nor the supply of gasoline is perfectly elastic or inelastic.As a result of the tax cut, the price for a gallon of gasoline paid by buyers

A)falls by 15 percent.
B)rises by 15 percent.
C)falls by less than 15 percent.
D)rises by less than 15 percent.
E)falls by more than 15 percent.

Question 12

The incidence of a tax refers to

A)the division of the burden of a tax between buyers and sellers.
B)the deadweight loss that a tax generates.
C)the inefficiency of a tax.
D)the revenue collected by government because of a tax.
E)the division of the burden of a tax between the public and the government.

Question 13

If a good has a tax levied on it, sellers respond to the price that excludes the tax and not the price with the tax because

A)the tax is handed over to the state directly by buyers.
B)sellers do not get to keep the tax revenue.
C)the demand for the good has decreased.
D)the quantity supplied of the good increases.
E)demanders pay none of the tax.

Question 14

Tax incidence is the

A)dollar amount of a tax, expressed as a percentage of the purchase price.
B)dollar amount of a tax per unit sold.
C)division of a tax burden between the buyer and seller.
D)amount of revenue collected by government on a specific good.
E)deadweight loss from the tax.

Question 15

Suppose the government imposes a $1 per gallon per gallon tax on sellers of gasoline.As a result, the

A)supply curve shifts leftward.
B)supply curve shifts rightward.
C)demand curve shifts leftward.
D)demand curve shifts rightward.
E)demand and supply curves both shift leftward.

Question 16

In the figure above, suppose that the government imposes a tax of $4 per pizza.Then, the

A)buyers and sellers equally share the incidence of the tax.
B)shaded area is the deadweight loss from the tax.
C)shaded area is the tax revenue from the tax.
D)Both answers A and B are correct.
E)Both answers A and C are correct.

Question 17

The imposition of a tax on a good enables the government to

A)raise the price received by sellers of the goods that have been taxed.
B)lower the price paid by buyers for the goods that have been taxed.
C)create a more efficient economic system.
D)take part of consumer and producer surplus as tax revenue when the good is purchased.
E)decrease the deadweight loss in this market.

Question 18

Neither the demand nor the supply of gasoline is perfectly elastic or inelastic.When the government increases the federal tax on gasoline, the effect on buyers is that the price they pay

A)rises.
B)falls.
C)does not change.
D)rises if the demand is inelastic and falls if the demand is elastic.
E)rises if the supply is inelastic and falls if the supply is elastic.

Question 19

Sales taxes are usually collected from sellers, who view the tax as

A)resulting from a leftward of the demand curve.
B)an additional cost of selling the good.
C)an addition to the demand for the product.
D)an addition to profit.
E)the same as a rightward shift of the demand curve.

Question 20

To calculate the revenue government receives when a tax is imposed on a good, multiply the

A)pre-tax equilibrium price by the pre-tax quantity.
B)after-tax equilibrium price by the after-tax quantity.
C)tax by the pre-tax quantity.
D)tax by the after-tax quantity.
E)after-tax equilibrium price by the after-tax quantity and then subtract the pre-tax equilibrium price multiplied by the pre-tax quantity.

Question 21

The figure above shows the market for tires.The government has imposed a tax on tires, and the buyers pay ________ of the tax.

A)$10
B)$20
C)$50
D)$60
E)$30

Question 22

The figure above shows the market for tires.According to the figure, the government collects ________ per month in total tax revenue

A)$600 million
B)$1,200 million
C)$2,000 million
D) $900 million
E)None of the above answers is correct.

Question 23

The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S₀ to S₁.The quantity of buckets without the tax is ________ and the quantity with the tax is ________.

A)400; 600
B)600; 400
C)400; 400
D)800; 500
E)600; 500

Question 24

If a tax is placed on suppliers of a good, then the incidence of the tax

A)falls more on the sellers if demand is elastic.
B)falls more on the sellers if demand is inelastic.
C)is usually split equally between the buyers and the sellers.
D)usually falls more on the sellers than the buyers.
E)usually falls more on the buyers than the sellers.

Question 25

If the demand curve for a good is horizontal, a tax is levied on this product is

A)split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more.
B)split evenly between the buyers and the sellers.
C)paid entirely by buyers.
D)paid entirely by sellers.
E)not paid by either the buyers or the sellers.

Question 26

The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S₀ to S₁.The amount of this tax is ________ per bucket of golf balls.

A)$4
B)$2
C)$2.50
D)$1
E)$3

Question 27

The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S₀ to S₁.The total tax revenue is equal to

A)$1,800.
B)$600.
C)$1,200.
D)$900.
E)$5,600.

Question 28

The figure above shows the market for tires.The figure shows that the government has imposed a tax of ________ per tire.

A)$10
B)$30
C)$40
D)$60
E)None of the above answers is correct.

Question 29

The figure above shows the market for tires.The government has imposed a tax on tires, and the sellers pay ________ of the tax.

A)$10
B)$20
C)$50
D)$60
E)$30

Question 30

For a given supply elasticity, the more inelastic the demand for a good, the larger the share of the tax paid by the

A)buyers.
B)sellers.
C)participants other than the buyers and sellers.
D)government.
E)None of the above answers is correct.

Question 31

The demand for insulin is quite inelastic.The demand for Pepsi is quite elastic.Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi.If a $0.20 tax was imposed on each of these goods (holding everything else constant), which consumers would pay more of the tax?

A)the Pepsi consumers
B)the insulin consumers
C)There would be no difference in the amount of tax paid by the consumers.
D)More information is needed to determine which consumers pay more of the tax.
E)The premise of the question is wrong because the elasticity of demand and the incidence of a tax are not related.

Question 32

The demand for gasoline is inelastic and the supply of gasoline is elastic.Therefore,

A)sellers bear most of the incidence of a tax on gasoline.
B)buyers bear most of the incidence of a tax on gasoline.
C)the government bears most of the incidence of a tax on gasoline.
D)the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers.
E)None of the above answers is correct.

Question 33

The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S₀ to S₁.The tax incidence is

A)split equally between buyers and sellers, each paying $1 per bucket.
B)split equally between buyers and sellers, each paying $2 per bucket.
C)such that buyers pay $2 per bucket and sellers pay $1 per bucket.
D)such that buyers pay $1 per bucket and sellers pay $2 per bucket.
E)such that sellers pay all of the tax.

Question 34

The above figure shows the market for gourmet ice cream.In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S₀ to S₁.The tax incidence is

A)split equally between consumers and producers, each paying $1 per gallon.
B)split equally between consumers and producers, each paying $2 per gallon.
C)such that consumers pay $2 per gallon and producers pay $1 per gallon.
D)such that consumers pay $1 per gallon and producers pay $2 per gallon.
E)such that producers pay all of the tax.

Question 35

The figure above shows the market for tires.According to the figure, the price elasticity of demand is ________ the price elasticity of supply.

A)greater than
B)equal to
C)less than
D)not comparable to
E)More information is needed to determine if the price elasticity of demand is greater than, equal to, less than, or comparable to the price elasticity of supply.

Question 36

Suppose that the elasticity of demand for insulin is 0.1, the elasticity of demand for oranges is 1.2, and the elasticity of supply for insulin and oranges is 0.4.If the government imposes a 10 percent tax on both insulin and oranges, the decrease in the quantity of oranges is ________ the decrease in the quantity of insulin.

A)larger than
B)smaller than
C)equals to
D)not comparable to
E)More information is needed to determine how the decrease in the quantity of oranges compares to the decrease in the quantity of insulin.

Question 37

The above figure shows the market for gourmet ice cream.In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S₀ to S₁.The total tax revenue is equal to

A)$400,000.
B)$800,000.
C)$500,000.
D)$200,000.
E)More information is needed to determine the total tax revenue.

Question 38

The figure above shows the market for tires.The figure shows that the government has imposed a tax of ________ per tire and that ________ pay most of the tax.

A)$30; buyers
B)$40; buyers
C)$30; sellers
D)$60; sellers
E)$60; buyers

Question 39

The buyers pay all of a tax when the demand is

A)perfectly elastic.
B)more elastic than the supply.
C)more inelastic than the supply.
D)unit elastic.
E)perfectly inelastic.

Question 40

The above figure shows the market for gourmet ice cream.In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S₀ to S₁.The quantity of ice cream consumed before the tax is ________ gallons and the quantity consumed after the tax is ________ gallons.

A)300,000; 200,000
B)200,000; 250,000
C)250,000; 200,000
D)200,000; 300,000
E)200,000; 200,000

Question 41

Cigarettes are highly addictive and therefore have a very low elasticity of demand.A $2.00 increase in the national sales tax on cigarettes would likely cause the price paid by buyers of cigarettes to

A)increase by more than $1.00 but less than $2.00.
B)increase by $2.00.
C)increase by more than $2.00.
D)increase by less than $1.00.
E)remain unchanged.

Question 42

Suppose the supply of apartments in Minneapolis is perfectly elastic.The effect of a $100 per month tax on all apartments is that

A)landlords pay none of the tax and there is a surplus of apartments.
B)landlords pay all of the tax and suffer all of the deadweight loss.
C)landlords pay all of the tax and no changes take place in the quantity of apartments supplied.
D)renters pay all of the tax.
E)the government collects no tax revenue because the supply is perfectly elastic.

Question 43

If buyers pay more of a tax than do the sellers,

A)demand is more elastic than supply.
B)the amount of tax revenue collected by the government is almost zero.
C)supply is more elastic than demand.
D)the equilibrium price paid by buyers rises by less than half the amount of the tax.
E)None of the above answers is correct.

Question 44

If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,

A)the buyer pays all the tax.
B)the seller pays all the tax.
C)the buyer pays 3/4 of the tax.
D)the seller pays 3/4 of the tax.
E)the buyer pays 4/3 of the tax.

Question 45

When a tax is imposed on a good or a service, the marginal benefit of the last unit bought ________ the marginal cost of the last unit.

A)is equal to
B)is greater than
C)is less than
D)None of the above answers is correct because there is no consistent relationship between the marginal benefit of the last unit and its marginal cost.
E)is not able to be compared to

Question 46

Why do sellers pay all of a tax when supply is perfectly inelastic?

A)because a perfectly inelastic supply means that the demand is elastic
B)because the government requires firms to collect the tax
C)because a perfectly inelastic supply means that the quantity supplied is quite sensitive to a change in price
D)because a perfectly inelastic supply means that suppliers will produce the same amount regardless of the price
E)because in this case the price of the good that suppliers receive and keep does not change

Question 47

Suppose the demand for specialty car license plates is perfectly inelastic and the supply curve for specialty license plates is upward sloping.A tax is imposed on specialty license plates.Which of the following is true?

A)Drivers pay the smallest share of the tax.
B)Drivers pay none of the tax.
C)Drivers pay all of the tax.
D)The government pays all of the tax.
E)The government collects nothing in tax revenues.

Question 48

The supply of sand is perfectly inelastic and the demand curve for sand is downward sloping.Hence, if a tax on sand is imposed,

A)sand buyers pay the entire tax.
B)sand sellers pay the entire tax.
C)the tax is split evenly between the buyers and sellers.
D)the government pays the entire tax.
E)the government collects no tax revenue because the supply is perfectly inelastic.

Question 49

For a given elasticity of demand, the less elastic the supply, the

A)larger the deadweight loss from a tax.
B)larger the share of a tax paid by the sellers.
C)greater the burden on the government from a tax.
D)greater is the excess burden from a tax.
E)larger the share of a tax paid by the buyers.

Question 50

Suppose the demand for Georgia peaches is perfectly elastic.If the supply curve is upward sloping and a tax is imposed on Georgia peaches, then

A)peach sellers pay all of the tax.
B)peach buyers pay all of the tax.
C)peach buyers and sellers evenly split the tax.
D)the government does not collect any revenue from the tax.
E)the tax does not change the equilibrium quantity of peaches.

Question 51

If the government eliminates a tax on a good with a perfectly elastic supply, who benefits most?

A)buyers
B)sellers
C)buyers if the demand is also perfectly elastic, otherwise sellers
D)buyers if the demand is unit elastic, otherwise sellers
E)Buyers and sellers benefit equally.

Question 52

Suppose the elasticity of demand for a product is 0 and elasticity of supply is 1.If the government imposes a tax on the product, then

A)buyers and sellers pay exactly the same share of the tax.
B)buyers pay all of the tax.
C)sellers pay all of the tax.
D)buyers pay a smaller share of the tax than do sellers, but both buyers and sellers pay some of the tax.
E)because the elasticity of demand is zero, the government collects no revenue from this tax.

Question 53

A tax

A)places a wedge between the price paid by the buyers and the price received by the sellers.
B)reduces consumer surplus and producer surplus.
C)decreases government spending.
D)Both answers A and B are correct.
E)None of the above answers are correct.

Question 54

The loss to society resulting from a tax includes the

A)deadweight loss.
B)consumer surplus paid to the government in the form of tax revenue.
C)producer surplus paid to the government in the form of tax revenue.
D)deadweight loss plus the consumer surplus and producer surplus paid to the government as tax revenue.
E)deadweight loss minus the tax revenue collected by the government.

Question 55

A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if

A)demand is perfectly inelastic.
B)demand is perfectly elastic.
C)demand is unit elastic.
D)demand is inelastic, but not perfectly inelastic.
E)demand is elastic, but not perfectly elastic.

Question 56

When a tax is imposed on a good, at the after-tax equilibrium the marginal benefit of the last unit produced ________ the marginal cost.

A)equals
B)is greater than
C)is less than
D)can be calculated but is not comparable to
E)The premise of the question is incorrect because after a tax is imposed, it becomes impossible to determine the marginal benefit and the marginal cost.

Question 57

Suppose the elasticity of supply of land is 0 and elasticity of demand is 2.If the government imposes a 10 percent tax on land, then

A)buyers and sellers each pay 5 percent of the tax.
B)buyers pay all of the tax.
C)sellers pay all of the tax.
D)sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax.
E)buyers pay 1/2 of the tax.

Question 58

Sellers bear the entire incidence of a tax on a good.This outcome can occur if

A)supply is perfectly inelastic.
B)the good is an inferior good.
C)demand is perfectly inelastic.
D)the demand curve is downward sloping and the supply curve is upward sloping.
E)supply is perfectly elastic.

Question 59

If the supply of automobiles becomes more inelastic, then a tax on automobiles is

A)paid more by the buyers after the change than before.
B)paid more by the sellers after the change than before.
C)always split evenly between the buyers and the sellers.
D)paid more by the government after the change than before.
E)always paid entirely by the buyers.

Question 60

The inefficiency of a sales tax on a good is ultimately the result of the

A)low tax revenue earned by the government relative to the cost of collection.
B)wedge between what buyers pay for the good and what sellers receive for the good.
C)buyers being unable to avoid paying the tax.
D)sellers being unable to avoid paying the tax.
E)increase in the consumer surplus that is more than offset by the decrease in the producer surplus.

Question 61

If a $1 sales tax is imposed on the sale of a CD, and neither the demand nor the supply is perfectly elastic or perfectly inelastic, then the price of a CD paid by consumers will

A)increase by $1 and fewer CDs will be bought.
B)increase by less than $1 and fewer CDs will be bought.
C)not change and the same number of CDs will be bought.
D)increase by $1 and the same number of CDs will be bought.
E)increase by more than $1 and fewer CDs will be bought.

Question 62

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So, imposing a tax on the good results in a ________ in the price received and kept by sellers and a ________ in the price paid by buyers.

A)rise; rise
B)rise; fall
C)fall; rise
D)fall; fall
E)no change; rise

Question 63

The graph shows the market for textbooks.If the government introduces a tax of $20 a textbook, then the price paid by buyers ________.

A)increases by $20
B)increases to $80 a textbook
C)decreases to $60 a textbook
D)is $70 a textbook
E)does not change because the demand for textbooks is perfectly elastic

Question 64

The above figure shows the demand curves in four different markets.If each of the markets has an identical upward sloping supply curve and the same tax is levied on suppliers, which market would produce the largest amount of deadweight loss?

A)A
B)B
C)C
D)D
E)C and D

Question 65

The above figure shows the supply curves in four different markets.If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?

A)A
B)B
C)C
D)D
E)A and D

Question 66

The deadweight loss of a tax

A)is the transfer of income from households to the government.
B)determines the incidence of a tax.
C)is part of the total burden of a tax.
D)is greater than the total burden of a tax.
E)equals the tax revenue collected by the government.

Question 67

When a tax is imposed on a good or service, the

A)revenue gained by the government is the excess burden.
B)deadweight loss that arises from a tax is the excess burden.
C)share of the tax paid by the buyer is the excess burden.
D)share of the tax paid by the seller is the excess burden.
E)amount the government collects as tax revenue is the deadweight loss from the tax.

Question 68

Suppose the demand for barley is perfectly elastic.The supply curve of barley is upward sloping.If a tax is imposed on barley,

A)barley sellers pay the entire tax.
B)barley buyers pay the entire tax.
C)the government pays the entire tax.
D)the tax is split evenly between barley buyers and sellers.
E)who pays the tax depends on whether the government imposes the tax on barley sellers or on barley buyers.

Question 69

The deadweight loss from a tax

A)is the tax revenue the government collects when people die.
B)is the split of a tax between the amount paid and the amount collected.
C)equals the amount collected as revenue from the tax.
D)is called the excess burden of the tax.
E)equals the amount collected as revenue from the tax plus the excess burden of the tax.

Question 70

If neither the demand nor supply of a good is perfectly elastic or inelastic, a tax on the good ________ consumer surplus and ________ producer surplus.

A)decreases; decreases
B)increases; increases
C)decreases; increases
D)increases; decreases
E)decreases; does not change

Question 71

Suppose the elasticity of demand for Mexican food is 3.00 and the elasticity of supply is 1.20.If the government imposes a sales tax on Mexican food, which of the following occurs?
I∙Less Mexican food is purchased by buyers.
Ii∙Less Mexican food is produced by sellers.
Iii∙The government receives the excess burden as revenue.
Iv∙Both the consumer and the producer surplus decrease.

A)i and ii
B)iii only
C)i, ii, and iv
D)iv only
E)i, ii, iii, and iv

Question 72

The above figure shows the supply curves in four different markets.If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the largest amount of deadweight loss?

A)A
B)B
C)C
D)D
E)A and D

Question 73

When a product is taxed,

A)part of the initial consumer surplus goes to the government as revenue.
B)part of the initial consumer surplus becomes a deadweight loss.
C)the producer surplus never changes because consumers pay taxes, not producers.
D)Both answers A and B are correct.
E)Both answers B and C are correct.

Question 74

The size of the deadweight loss, or excess burden, of a tax depends on the

A)amount of producer surplus but not the amount of consumer surplus because it is the producers who send the tax revenues to the government.
B)strength of demand.
C)strength of supply.
D)elasticities of demand and supply.
E)number of demanders and the number of suppliers.

Question 75

The above figure shows the demand curves in four different markets.If each of the markets has an identical upward sloping supply curve and the same tax is levied on suppliers, which market would produce the smallest amount of deadweight loss?

A)A
B)B
C)C
D)D
E)C and D

Question 76

At harvest time the supply of wheat is perfectly inelastic.If the government taxes wheat at $1 a bushel, then

A)the seller pays the entire tax.
B)the buyer pays the entire tax.
C)the seller and the buyer split the tax evenly.
D)the seller and the buyer split the tax but the seller pays more.
E)no one pays the tax because the wheat must be harvested or it will go to waste.

Question 77

The excess burden of a tax refers to the fact that

A)the benefits from a tax exceed the tax revenue.
B)the deadweight loss from a tax exceeds the remaining consumer surplus.
C)marginal cost is greater than marginal benefit after the tax.
D)a tax creates a deadweight loss.
E)taxes are split between buyers and sellers.

Question 78

The demand for apple pies is perfectly elastic.If the government taxes apple pies at $1 a pie, then ________.

A)the seller pays the entire tax
B)the buyer pays the entire tax
C)the seller and the buyer split the tax evenly
D)the seller and the buyer split the tax but the seller pays more
E)who pays the tax depends on whether the government imposes the tax on pie buyers or on pie sellers

Question 79

Tax incidence refers to

A)how government taxes are spent by the government.
B)the incidences of tax revolts by the taxpayers.
C)the amount of a tax minus its burden.
D)the division of the burden of a tax between the buyer and the seller.
E)tax revenue minus excess burden.

Question 80

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So, imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity.

A)rise; an increase
B)rise; a decrease
C)fall; an increase
D)fall; a decrease
E)a rise; no change