6. Which of the following best describes the effects of a per unit purchased tax
ID: 1138464 • Letter: 6
Question
6. Which of the following best describes the effects of a per unit purchased tax on producers when the demand curve and the supply curve are both neither perfectly elastic nor perfectly inelastic?
a) Price to consumers increases; price received by producers increases; quantity bought and sold increases
b) Price to consumers increases; price received by producers decreases; quantity bought and sold increases
c) Price to consumers decreases; price received by producers increases; quantity bought and sold increases
d) Price to consumers increases; price received by producers decreases; quantity bought and sold decreases
7. Which of the following best describes the effects of a per unit purchased subsidy to producers when the demand curve and the supply curve are both neither perfectly elastic nor perfectly inelastic?
a) Price to consumers increases; price received by producers increases; quantity bought and sold increases
b) Price to consumers increases; price received by producers decreases; quantity bought and sold increases
c) Price to consumers decreases; price received by producers increases; quantity bought and sold increases
d) Price to consumers increases; price received by producers decreases; quantity bought and sold decreases
8. Which of the following best describes the effects of a $1 per unit purchased tax on producers when the demand curve is perfectly inelastic and the supply curve is neither perfectly elastic nor perfectly inelastic?
a) Price to consumers increases by $1
b) Price to consumers increases by less $1
c) Price to consumers stays the same
d) Price to consumers decreases by $1
9. Which of the following best describes the effects on the price that consumers pay when considering a $1 per unit tax on consumers versus a $1 per unit tax on producers?
a) The price that consumers pay is higher with a tax on consumers
b) The price that consumers pay is higher with a tax on producers
c) The price that consumers pay is the same
d) Which tax leads to a higher price is uncertain
For question 10, please use the following information for the demand curve and supply curve:
QD =1000–2P QS =-200+P
10. What is the quantity bought and sold if the government implements a tax of $30/unit?
a) 150 b ) 180 c) 200 d) 400
Explanation / Answer
6) Price to consumers increases; price received by producers decreases; quantity bought and sold decreases.
so, correct option is D.
7) Price to consumers decreases; price received by producers increases; quantity bought and sold increases
So, correct option is C.
8) Price to consumers stays the same because demand curve is horizontal
So, correct option is C.
9) Which tax leads to a higher price is uncertain is correct because change in price depends on elasticity of demand and supply.
so, correct option is D.
10) after tax,
QD =1000–2(P + 30)
at equilibirium
QD= QS
1000–2(P + 30)= -200 +P
1,140= +3P
P= 380
Q= -200 + 380= 180
so, correct option is B.
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