Question 1

-The figure above shows the market for tickets to the Super Bowl the day of the game.Suppose the government imposes an entertainment tax of $100 per ticket.
a.What is the equilibrium price of a Super Bowl ticket before the tax? What is the price paid by buyers after the tax? What is the price received by sellers after the tax?
b.What is the equilibrium quantity of tickets before the tax? What is the equilibrium quantity after the tax?
c.Do buyers or sellers bear most of the incidence of the tax?

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-The figure above shows the market for...

Question 2

-The table above gives the taxable income and the amount of tax paid.
a.Is this income tax progressive,regressive,or proportional?
b.If the taxable income is $25,000,what is the average tax rate?
c.If taxable income increases from $25,000 to $30,000,what is the marginal tax rate?

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-The table above gives the taxable income...

Question 3

Ali earns $20,000 and pays $2,000 in taxes; Maria earns $40,000 and pays $4,000 in taxes.Is this tax progressive,regressive,or proportional?

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Question 4

-The figure above illustrates the market for antifreeze.Suppose the government decides to impose an $8 sales tax on every gallon of antifreeze sold.
a.In the figure,illustrate the effect the tax has on the market for antifreeze.
b.What is the equilibrium price of a gallon of antifreeze before the tax? What is the price paid by buyers after the tax?
c.What is the equilibrium quantity of antifreeze before the tax? What is the equilibrium quantity after the tax?
d.What is the revenue collected by the government from this tax?
e.Do buyers or sellers bear the largest burden of the tax?
f.Illustrate the deadweight loss created by the tax.

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-The figure above illustrates the market for...

Question 5

"For the U.S.personal income tax,the average tax rate is greater than the marginal tax rate." Is the previous statement correct or incorrect?

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Question 6

In the Village of Punjab,Sheryl owns a well,which is the only source of drinking water.The supply of water is perfectly inelastic at a quantity of 1,000 gallons of water per day.At a price of $2.00 per gallon,the quantity demanded per day is 1,000 gallons.The government imposes a $0.50 per gallon tax.
a.After the tax is imposed,what is the price paid by the villagers? What is the price received by Sheryl?
b.How much revenue does the government collect?
c.What fraction of the tax does Sheryl pay? What fraction is paid by the villagers?

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Question 7

-The figure above shows the market for a life-saving drug.Suppose the government imposes a $150 tax per dose on the drug.Show and describe the impact on the market.Who pays this tax?

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-The figure above shows the market for...

Question 8

Is the deadweight loss from a sales tax on a product larger the more inelastic the demand for the good?

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Question 9

Suppose the demand for saline solution is perfectly inelastic for contact lens wearers.If the government imposes a tax on saline solution,what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.

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Question 10

Describe the effects of an increase in the tax on labor income.

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Question 11

-The figure above shows the market for gasoline.The government has imposed a tax on gasoline.
a.What is the amount of the tax per gallon of gasoline?
b.How much tax revenue will government collect from this tax?
c.How much of the tax is paid by buyers? How much is paid by sellers? Which is more elastic,the supply or demand for gasoline?

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-The figure above shows the market for...

Question 12

What is the difference in the tax incidence between imposing the Social Security tax on workers and imposing the same tax on employers?

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Question 13

Why are sales taxes,which require that everyone pay the same percentage tax,considered regressive taxes?

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Question 14

Suppose the government decides to tax salt.The demand for salt is inelastic and the supply is quite elastic.Who bears most of the tax incidence and pays most of this tax?

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Question 15

Which would be a better source of tax revenue for the government,a good with elastic or a good with an inelastic demand? Explain your reasoning.

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Question 16

"In the United States,more tax revenue is collected through Social Security taxes than through property taxes." Is the previous statement correct or incorrect?

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Question 17

Consider the market for dining at Mexican restaurants.Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47.If the government imposes a tax on Mexican food,do buyers or sellers pay most of the tax? Why?

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Question 18

If the supply of land is perfectly inelastic,what is the deadweight loss from a tax on land?

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Question 19

If income tax rates on labor income are decreased,what is the effect on the labor supply and the labor supply curve? What is the effect on the equilibrium quantity of labor hired?

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Question 20

What is the marginal tax rate? Average tax rate? Can these rates ever differ?

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Quiz 8: Taxes

-The table above gives the taxable income and the amount of tax paid. a.Is this income tax progressive,regressive,or proportional? b.If the taxable income is $25,000,what is the average tax rate? c.If taxable income increases from $25,000 to $30,000,what is the marginal tax rate?

Ali earns $20,000 and pays $2,000 in taxes; Maria earns $40,000 and pays $4,000 in taxes.Is this tax progressive,regressive,or proportional?

"For the U.S.personal income tax,the average tax rate is greater than the marginal tax rate." Is the previous statement correct or incorrect?

-The figure above shows the market for a life-saving drug.Suppose the government imposes a $150 tax per dose on the drug.Show and describe the impact on the market.Who pays this tax?

Is the deadweight loss from a sales tax on a product larger the more inelastic the demand for the good?

Suppose the demand for saline solution is perfectly inelastic for contact lens wearers.If the government imposes a tax on saline solution,what occurs? Be sure to tell what happens to the price paid by the buyers and discuss the incidence of the tax.

Describe the effects of an increase in the tax on labor income.

What is the difference in the tax incidence between imposing the Social Security tax on workers and imposing the same tax on employers?

Why are sales taxes,which require that everyone pay the same percentage tax,considered regressive taxes?

Suppose the government decides to tax salt.The demand for salt is inelastic and the supply is quite elastic.Who bears most of the tax incidence and pays most of this tax?

Which would be a better source of tax revenue for the government,a good with elastic or a good with an inelastic demand? Explain your reasoning.

"In the United States,more tax revenue is collected through Social Security taxes than through property taxes." Is the previous statement correct or incorrect?

Consider the market for dining at Mexican restaurants.Suppose the price elasticity of demand for Mexican food is 1.23 and the price elasticity of supply is 0.47.If the government imposes a tax on Mexican food,do buyers or sellers pay most of the tax? Why?

If the supply of land is perfectly inelastic,what is the deadweight loss from a tax on land?

If income tax rates on labor income are decreased,what is the effect on the labor supply and the labor supply curve? What is the effect on the equilibrium quantity of labor hired?

What is the marginal tax rate? Average tax rate? Can these rates ever differ?