Question 1

A tax on buyers will shift the

Accepted Answer

A tax on buyers increases the cost of the good for consumers, leading them to purchase less of the product at any given price. This will result in a leftward shift of the demand curve, decreasing the quantity demanded at every price by the amount of the tax. Thus, option B is the best answer.

Question 2

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

Accepted Answer

When the tax is shifted from buyers to sellers, the price to buyers will remain the same as before. However, sellers may choose to pass on the tax burden to buyers by raising their prices, but it's not necessary. Ultimately, the market will determine the price, and the tax burden will be shared between the buyers and sellers, depending on their bargaining power. Therefore, the price paid by buyers will not change, and the price received by sellers will not change at the onset.

Question 3

Which of the following is not correct?

Accepted Answer

Taxes levied on sellers and taxes levied on buyers are equivalent in terms of their economic impact. The division of the tax burden between buyers and sellers depends on the relative elasticities of supply and demand, not on whom the tax is officially levied.

Question 4

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy,then

Accepted Answer

The demand curve shifts downward by $5 because the tax effectively increases the price buyers pay, reducing the quantity demanded at each price level.

Question 5

If the government wants to reduce smoking,it should impose a tax on

Accepted Answer

Imposing a tax on either buyers or sellers will effectively reduce smoking because the tax will increase the price of cigarettes, leading to a decrease in quantity demanded.

Question 6

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $20 per ticket,then the

Accepted Answer

The answer of Suppose there is currently a tax of...

Question 7

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

Accepted Answer

The tax incidence, or the burden of the tax, does not depend on whether the tax is levied on buyers or sellers. The market outcome remains the same, so the price paid by buyers and the price received by sellers do not change.

Question 8

A $5 tax levied on the buyers of pants will cause the

Accepted Answer

A tax on buyers, or a sales tax, will reduce the quantity demanded for pants as it increases the price for the consumers. Hence, it will cause the demand curve to shift down by the amount of the tax ($5). It will not affect the supply curve as it is a tax on the buyers, not the sellers.

Question 9

When a tax is placed on the buyers of a product,the

Accepted Answer

When a tax is placed on buyers, it typically leads to a decrease in the size of the market, a decrease in the effective price received by sellers, and an increase in the price paid by buyers, which can also decrease demand.

Question 10

A tax on the buyers of personal computer external hard drives encourages

Accepted Answer

When there is a tax on the buyers of personal computer external hard drives, the price for the buyers goes up. Therefore, buyers would be willing to purchase fewer external hard drives at every price. This results in a decrease in demand, which is captured by choice B. Choice A is incorrect because it suggests that suppliers would respond by decreasing the quantity supplied, but this is not necessarily true. It depends on whether the tax is passed on to the sellers or absorbed by the buyers. Choice C is incorrect because it suggests that buyers would respond by increasing the quantity demanded, but this is not consistent with the law of demand.

Question 11

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Accepted Answer

A tax on buyers decreases their willingness to pay for each quantity, shifting the demand curve downward by the full amount of the tax, which is $1.50.

Question 12

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy.Further,suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle.Which of the following statements is correct?

Accepted Answer

The tax causes the demand curve for vodka to shift downward by $5.00 at each quantity of vodka because buyers must now pay $5.00 more for each bottle. The price paid by buyers is $2.00 per bottle more than it was before the tax because the tax causes the effective price received by sellers to fall by $3.00 per bottle. Sixty percent of the burden of the tax falls on sellers because they receive $3.00 less for each bottle of vodka they sell.

Question 13

Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy.Further,suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink.Which of the following statements is correct?

Accepted Answer

The tax causes the demand curve to shift downward by $0.50 at each quantity, as buyers are now paying $0.50 more for each drink. The price paid by buyers is $0.30 per drink more than it was before the tax, as the tax causes the effective price received by sellers to fall by $0.20 per drink. Forty percent of the burden of the tax falls on sellers, as they are receiving $0.20 less per drink than they were before the tax.

Question 14

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

If a tax is levied on the buyers of a product, then the cost of buying the product increases, which decreases the quantity demanded. This results in a movement down and to the left along the supply curve. Therefore, the correct choice is D.

Question 15

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

When a tax is levied on the buyers of a product, they will have to pay more than before for the same quantity of the product, resulting in a higher effective price. This will cause a decrease in the quantity demanded, which will result in a downward shift of the demand curve.

Question 16

If a tax is levied on the buyers of a product,then the supply curve will

Accepted Answer

A tax on buyers affects the demand curve, not the supply curve. The supply curve remains unchanged.

Question 17

When a tax is levied on buyers of tea,

Accepted Answer

When a tax is levied on buyers, the price they pay effectively increases, reducing their consumer surplus. Sellers may receive a lower effective price, reducing their producer surplus. Thus, both parties are made worse off.

Question 18

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Accepted Answer

A reduction in tax lowers the overall cost of the product for consumers, which increases the quantity demanded at each price level. Therefore, the demand curve will shift upward. However, the effective price received by sellers will not increase by the full amount of the tax reduction ($20) because they will have to lower their prices somewhat to attract more buyers. As a result, the effective price increase for sellers will be less than $20. The supply curve, on the other hand, is unaffected by the tax change, so option C and D are incorrect.

Question 19

When a tax is imposed on the buyers of a good,the demand curve shifts

Accepted Answer

When a tax is imposed on the buyers of a good, the demand curve shifts downward by the amount of the tax. This is because buyers now have to pay a higher price for the same quantity of the good, which reduces their willingness and ability to buy it. Therefore, the quantity demanded decreases, causing the demand curve to shift downward.

Question 20

If a tax is levied on the buyers of a product,then the demand curve will

Accepted Answer

When a tax is levied on the buyers of a product, the price of the product increases for the buyers. As a result, the quantity demanded decreases, causing the demand curve to shift down. This is because the buyers are less willing to purchase the product at a higher price.

Quiz 6: Supply Demand and Government Policies: Taxes

A tax on buyers will shift the

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars,then the price paid by buyers will

Which of the following is not correct?

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy,then

If the government wants to reduce smoking,it should impose a tax on

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $20 per ticket,then the

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

A $5 tax levied on the buyers of pants will cause the

When a tax is placed on the buyers of a product,the

A tax on the buyers of personal computer external hard drives encourages

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy.Further,suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle.Which of the following statements is correct?

Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy.Further,suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink.Which of the following statements is correct?

If a tax is levied on the buyers of a product,then there will be a(n)

If a tax is levied on the buyers of a product,then there will be a(n)

If a tax is levied on the buyers of a product,then the supply curve will

When a tax is levied on buyers of tea,

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

When a tax is imposed on the buyers of a good,the demand curve shifts

If a tax is levied on the buyers of a product,then the demand curve will