ECN 104 Chapter 7 Test Questions and Answers All Correct
0 view 0 purchase
Course
ECN 104
Institution
ECN 104
ECN 104 Chapter 7 Test Questions and Answers All Correct
When ___________ are paying tax it affects supply - Answer- sellers
When ________ are paying tax it affects demand - Answer- buyers
Tax Incidence - Answer- measure of who really bears the tax burden
Principles of taxation - Answer-...
ECN 104 Chapter 7 Test Questions
and Answers All Correct
When ___________ are paying tax it affects supply - Answer- sellers
When ________ are paying tax it affects demand - Answer- buyers
Tax Incidence - Answer- measure of who really bears the tax burden
Principles of taxation - Answer- 1) incidence doesn't depend on who officially pay the
tax
2) Incidence depends on shapes of supply / demand curves ( price elasticities)
Deadweight loss - Answer- larger when supply/ demand is elastic
smaller when supply/ demand is inelastic
price elasticity of demand is high, and elasticity of supply is low, burden of excise tax
falls on _____________ - Answer- Producers
Price of elasticity of demand is low, price elasticity of supply is high, burden of an excise
tax falls on ___________ - Answer- Consumers
lower price of good ___________ consumer surplus - Answer- increases
higher price of a good ___________ consumer surplus - Answer- decreases
General principle - Answer- Revenue collected by excise tax is equal to area of the
rectangle whose height is tax wedge between supply and demand curves and whose
width is the quantity transacted.
tax reduces both : - Answer- consumer/ producer surplus.
Fall in quantity : - Answer- larger when demand and supply are elastic
Tax revenue: - Answer- larger when demand and supply in inelastic
Administrative costs - Answer- the resources used by government to collect the tax, and
by taxpayers to pay it, over and above the amount of the tax.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Scholarsstudyguide. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.99. You're not tied to anything after your purchase.
