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

Question

1.If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is paid fully by…………. 2.Sales taxes are usually collected from sellers, who view the tax as an additional …… of selling the good. 3.A sales tax imposed on sellers of a good ------ the supply and shifts the supply curve ……... 4.Suppose the government imposes a $1 per gallon per gallon tax on sellers of gasoline. As a result, the……….curve shifts ……... 5.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, both ------ and ------ pay part of the tax. 6.The imposition of a tax on a good enables the government to take part of consumer and producer ------ as tax revenue when the good is purchased. 7.The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,….. bear most of the incidence of a tax on gasoline. 8.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, ------- pay all of the tax. 9.The loss to society resulting from a tax includes the ……… loss. 10. A tax places a ……… between the price paid by the buyers and the price received by the sellers. ……….. consumer surplus and producer surplus.

Explanation / Answer

1.If a $10 sales tax is imposed on a good and the equilibrium price increases by $10, the tax is paid fully by buyer. 2.Sales taxes are usually collected from sellers, who view the tax as an additional cost of selling the good. 3.A sales tax imposed on sellers of a good affects the supply and shifts the supply curve to the left or upward. 4.Suppose the government imposes a $1 per gallon per gallon tax on sellers of gasoline. As a result, the supply curve shifts to the left. 5.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, both buyer and seller pay part of the tax. 6.The imposition of a tax on a good enables the government to take part of consumer and producer surplus as tax revenue when the good is purchased. 7.The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,buyer bear most of the incidence of a tax on gasoline. 8.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, buyer pay all of the tax. 9.The loss to society resulting from a tax includes the deadweight loss. 10. A tax places a gap/ wedge between the price paid by the buyers and the price received by the sellers. changes consumer surplus and producer surplus.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.