ECON 2030 Study Guide - Marginal Revenue, Economic Surplus, Deadweight Loss

14) Suppose the government institutes a $3/unit tax on the sales of some good and the price paid by consumers rises from $9 to $11. With this information we can say (on a per unit basis): A) that consumers bear none of the burden of this tax and producers bear the entire burden. B) that consumers bear the entire burden of this tax and producers bear none of the burden. C) that consumers bear $2 of the burden of this tax and producers bear $l of the burden. D) that consumers bear $2 of the burden of this tax and the government bears $1 of the burden. E) nothing about the burden of the tax without more information.

18. Which of the following statements about the elasticity of demand are likely to be true? 1) the elasticity of demand is generally larger in the long run than in the short run II) the elasticity of demand is generally larger in the short run than in the long run III) if the elasticity of demand is perfectly elastic, the buyer bears all of the burden of a tax IV) if the elasticity of demand is perfectly inelastic, the buyer bears all of the burden of a tax A) only! B) only 11 C) only III D) only IV E) I & II F) I & III G)I & IV H) II & III 1) II & IV J) III & IV K) I, II & III L) I, II & IV M) I, III & IV N) II, III & IV O) all four P) none of the four

Refer to figure 6-18. The per-unit burden of the tax on sellers is

a. $6.

b. $8.

c. $10.

d. $14.