Eco 450 Week 8 Quiz

ECO 450 Week 8 Quiz

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Question 1

Housing construction is generally believed to be an industry of constant costs. In the long run, which of the following is true if a $10 per square foot tax on housing construction is collected directly

from builders?

Question 2

Which of the following is true about a lump-sum tax?

Question 3

The demand for medical care is very inelastic. If a 10-percent tax is levied on the sale of medical services and is collected from medical-care providers, then:

Question 4

2 out of 2 points

Currently, a 10-cent per gallon tax is levied on gasoline consumption. The tax is increased to 20 cents per gallon. The excess burden of the tax will:

Answer

Question 5

Suppose an economy is comprised of only two markets: one for food and the other for housing. A tax on food used to finance transfer payments is likely to:

Answer

Question 6

A $0.30 per unit tax is imposed on a good that reduces the quantity supplied and demanded by 1000 units. What is the deadweight loss (ignore price elasticities)?

Answer

Question 7

The efficiency-loss ratio relative to tax is:

Answer

Question 8

2 out of 2 points

The current price of compact discs, which are traded in perfectly competitive markets, is $10. A $1 per unit tax is levied on the discs. Annual record sales decline from five million to four million as a result of the tax. Assuming that the income effect of the tax-induced price change is negligible, the excess burden of the tax will be:

Answer

Question 9

2 out of 2 points

If a lump-sum tax is imposed, the slope of the new budget line relative to the budget line prior to the tax:

Answer

Question 10

If the price elasticity of supply of labor is equal to 0.5 and the price elasticity of demand for labor is –2, then which of the following is likely to result from a tax on labor earnings?

Answer

Question 11

A lump-sum tax:

Answer

Question 12

2 out of 2 points

Other things being equal, the more inelastic the...