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ECON 2030 : Test Two Notes

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azuremammoth471
15 Mar 2019
School
LSU
Department
Economics
Course
ECON 2030
Professor
All

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Document Summary

Comp. ) but are small relative to the size of the market: slightly differentiated goods (mono. ) done mainly through advertising, no barriers to entry/exit (perf. Comp. : behavior in the short run, will produce where atc=p > mr=mc, behavior from short run to long run, changes in demand and profit, if there was entry into the market, or someone comes out with a. The consumer surplus in the market for automobiles will _________: suppose that the price of steel, a main component in in the production of automobiles, decreases. Producer surplus in the market for automobiles will _______: suppose that the price of steel, a main component in in the production of automobiles, decreases. Economic surplus in the market for automobiles will ________: a sales tax will be divided so that the _______ will bear the full burden of the tax if.

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Related Questions

5. If the government decides to levy a small excise tax on the buyers la perfectly competitive market in which the demand is perfectly elastic and supply curve is positively sloped, then we can conclude that: (A) The buyers will bear all of the tax, and there will be some excess burden. (B) The sellers will bear all of the tax, and there will be some excess burden. TC) The tax burden will be shared. The buyers will bear more of the tax than sellers, and there will be some excess burden. (D) The tax burden will be shared. The sellers will bear more of the tax than buyers, and there will be some excess burden. (E) The buyers will bear all of the tax, and there will be no excess burden. (F) The sellers will bear all of the tax, and there will be no excess burden. (G) The tax burden will be shared. The buyers will bear more of the tax than sellers, and there will be no excess burden. (H) The tax burden will be shared. The sellers will bear more of the tax than buyers, and there will be no excess burden. (1) The buyers will bear all of the tax, and they will also bear the excess burden. (J) none of the above

Label each of the following statements about the economics of taxes as true or false.
 
A) The incidence of a tax is determined by which group (buyers or sellers)
must actually pay the government.

B) When demand is inelastic and supply is elastic, the burden of a tax falls
mainly on producers.

C) When demand is elastic and supply is inelastic, the burden of a tax falls
mainly on consumers.

D) An excise tax can distort incentives and create missed opportunities for
mutually beneficial transactions.

Suppose the demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore, ____.

a. buyers bear most of the incidence of a tax on gasoline.

b. sellers bear most of the incidence of a tax on gasoline.

c. the government bears most of the incidence of a tax on gasoline.

d. the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers.