8

Question 1

Supposed cigarette taxes are cut in order to reduce monthly. Cigarette manufactures argue that the tax revenue loss would be small because more cigarettes to be legally purchased. Antismoking groups argue that the revenue loss would be larger. Based on this information, which one of the following can be presumed?
A) antismoking groups believe that the demand for legally purchase cigarettes is less elastic than the manufactures believe
B) antismoking groups believe that the demand for the glee purchase cigarettes is more elastic than manufactures believe
C) antismoking groups believe that the supply of smuggled cigarettes is equal to what the menu facture believe
D) antismoking groups believe that the supply of smothered cigarettes is more elastic than the manufacturers believe

Answer 1

A

Question 2

Which one of the following taxes would be least likely to result in the deadweight loss?
A) A tax on labor
B) a tax on housing
C) A tax on automobiles
D) a tax on the unimproved value of land

Answer 2

D

Question 3

Which one of the following best describes the implication of the Laffer curve?
A) policymakers should consider the relevant market elasticities
B) policymakers should consider whether a reduction in the tax rate would increase or decrease tax revenues
C) policymakers should consider whether raising taxes would discourage foreign investment
D) policymakers should consider whether Lowering taxes would encourage immigration

Answer 3

B

Question 4

Suppose that beer is taxed at a very low rate. Which one of the following describes what will happen to tax revenues if the government gradually increases the tax rate on beer
A) revenues fall
B) revenues rise
C) revenues rising initially, then eventually fall
D) revenues fall initially, and then eventually rise

Answer 4

C

Question 5

Which one of the following describes the EFax of rising tax rate on deadweight loss
A) deadweight loss increases more then proportionately
B) deadweight loss increases less than proportionately
C) deadweight loss decreases less than proportionately
D) deadweight loss decreases more than proportionately

Answer 5

A

Question 6

Imposing a sale tax on a project will blank consumer surplus and blank producer surplus

Answer 6

Decrease, decrease

Question 7

Which one of the following is more likely to increase the deadweight loss of income taxes on labor?
A) if workers have no control over their hours of work because the work week is standardized
B) if retirement age is mandated by law or custom
C) if the underground economy becomes more widespread
D) if parliament shifts the legal burden of the income tax to the employer

Answer 7

C