ch 6 MicroEcon

23 cards·by amcloopy

For the most part, all governments, federal, state, and local, rely on taxes to raise revenue for public purposes.

true

The term tax incidence refers to the Boston Tea Party.

false, how the burden of the tax is shared

The initial effect of a tax on the buyers of a good is on the supply of that good.

false, sellers

If a tax is imposed on the buyer of a product the demand curve would shift downward by the amount of the tax.

true

If buyers are required to pay a $0.10 tax per bag on Hershey’s kisses, the demand for kisses will shift up by $0.10 per bag.

false, down

A tax on the buyers of popcorn increases the size of the popcorn market.

false, decreases

For the most part, buyers and sellers share the burden of the tax.

true

When a tax is placed on the buyers of milk, the size of the milk market is reduced.

true

If a tax is levied on the seller of a product the demand curve will not change.

true

A tax placed on the seller of a product will raise equilibrium price and lower equilibrium quantity.

true

A tax placed on the seller of a good raises the price buyers pay and lowers the price sellers receive.

true

When a tax is placed on the sellers of a product the size of the market is reduced.

true

A tax on the sellers of cell phones will reduce the size of the cell phone market

true

A tax placed on the sellers of blueberries increases costs, lowers profit and shifts supply to the left (upward).

true

In the end, tax incidence depends on the legislated burden.

false, equally shared

If a tax is imposed on a market with inelastic demand and elastic supply, buyers will bear most of the burden of the tax.

true

Buyers of a product will pay the majority of a tax placed on a product when supply is more elastic than demand.

true

If a tax is imposed on a market with elastic demand and inelastic supply, buyers will bear most of the burden of the tax.

false, sellers

For the most part, a tax burden falls most heavily on the side of the market that is more inelastic.

true

The burden of a tax placed on a product depends on the supply and demand of that product.

true

If the seller ends up paying the majority of the tax we know that the demand curve is more inelastic than the supply curve

false, more elastic

If the buyer pays the majority of the tax we know that the supply curve is more inelastic than the demand curve

false, elastic

When analyzing the economic effects of government policies, supply and demand are useful tools of analysis

true