1.When a tax is imposed on the consumption of a good, which of the following terms refers to who bears the burden of the tax?

A)   The deadweight loss.

B)   The incidence of a tax.

C)   Consumer surplus.

D)   Consumer deficit.

2.Arthur Hampton is reviewing the transcript of a lawmaking session during which a legislator made the following two statements:

Statement 1: The impact of a tax on the equilibrium price and quantity of a good or service will be the same whether the tax is legally imposed on the buyers or sellers.

Statement 2: The impact on the equilibrium price and quantity of a good or service of making trade in it illegal will be the same whether the penalty is imposed on the buyers or sellers.

Should Hampton agree or disagree with these statements?

A)                                        Agree    Disagree

B)                                        Agree    Agree

C)                                        Disagree       Agree

D)                                        Disagree       Disagree

3.When a tax on a good or service is imposed on the producers of the good or service, the:

A)   supply will decrease, but the incidence of the tax falls on both buyers and sellers.

B)   demand will decrease, but the incidence of the tax falls on both buyers and sellers.

C)   supply will decrease, but the incidence of the tax falls on the sellers only.

D)   demand will decrease, but the incidence of the tax falls on the sellers only.

4.The decrease in production and trade as a result of a tax is called:

A)   total tax incidence.

B)   GDP tax drag.

C)   deadweight loss.

D)   statutory incidence.

5.Which of the following statements is most accurate with respect to the effects of taxes imposed on goods and services?

A)   The statutory incidence will fall more heavily on the buyer if the supply is less elastic relative to demand.

B)   The statuary incidence and the actual incidence will be the same if supply and demand elasticities are equal.

C)   The actual incidence will fall more heavily on the seller if the supply is less elastic relative to demand.

D)   The actual incidence will fall more heavily on the buyer if the demand is more elastic relative to supply.

答案和详解如下：

1.When a tax is imposed on the consumption of a good, which of the following terms refers to who bears the burden of the tax?

A)   The deadweight loss.

B)   The incidence of a tax.

C)   Consumer surplus.

D)   Consumer deficit.

The correct answer was B)

The incidence of a tax refers to how the burden of a tax is actually shared between buyers and sellers. The deadweight loss is the loss of the gains from trade from the lower equilibrium quantity that results from the tax. Consumer surplus is the gains from trade that consumers accrue from the existence of the market. Consumer deficit is a meaningless answer.

2.Arthur Hampton is reviewing the transcript of a lawmaking session during which a legislator made the following two statements:

Statement 1: The impact of a tax on the equilibrium price and quantity of a good or service will be the same whether the tax is legally imposed on the buyers or sellers.

Statement 2: The impact on the equilibrium price and quantity of a good or service of making trade in it illegal will be the same whether the penalty is imposed on the buyers or sellers.

Should Hampton agree or disagree with these statements?

Statement 1

Statement 2

A)                                        Agree    Disagree

B)                                        Agree    Agree

C)                                        Disagree       Agree

D)                                        Disagree       Disagree

The correct answer was A)

Hampton should agree with Statement 1 but disagree with Statement 2. In the trade of illegal goods, the effects of the prohibition depend on whether the penalties are imposed on the buyers or sellers. A penalty imposed on the buyers will shift the demand curve down by the value of the penalty buyers expect to bear. A penalty imposed on the sellers will shift the supply curve up by the value of the penalty sellers expect to bear. Other things equal, a penalty on buyers will result in a lower equilibrium price and a penalty on sellers will result in a higher equilibrium price. In either case the equilibrium quantity decreases.

3.When a tax on a good or service is imposed on the producers of the good or service, the:

A)   supply will decrease, but the incidence of the tax falls on both buyers and sellers.

B)   demand will decrease, but the incidence of the tax falls on both buyers and sellers.

C)   supply will decrease, but the incidence of the tax falls on the sellers only.

D)   demand will decrease, but the incidence of the tax falls on the sellers only.

The correct answer was A)

When a tax is imposed on the producers of a good or service, they will reduce supply at any given level or market price, because they receive the market price minus the tax. However, the incidence of the tax, meaning how its cost is shared, falls on both the buyers and the sellers, depending upon the relative elasticities of supply and demand.

4.The decrease in production and trade as a result of a tax is called:

A)   total tax incidence.

B)   GDP tax drag.

C)   deadweight loss.

D)   statutory incidence.

The correct answer was C)    

When the equilibrium quantity for a product or service is reduced as the result of a tax, this is called the deadweight loss. This represents the loss, in terms of production and trade, that results from the presence of the tax.

5.Which of the following statements is most accurate with respect to the effects of taxes imposed on goods and services?

A)   The statutory incidence will fall more heavily on the buyer if the supply is less elastic relative to demand.

B)   The statuary incidence and the actual incidence will be the same if supply and demand elasticities are equal.

C)   The actual incidence will fall more heavily on the seller if the supply is less elastic relative to demand.

D)   The actual incidence will fall more heavily on the buyer if the demand is more elastic relative to supply.

The correct answer was C)    

When supply is relatively inelastic, changes in quantity are small for a given change in price, and a larger share of the tax burden—the tax incidence—will fall on the sellers.