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Question;51. When;a tax is placed on the buyers of lemonade;a.;the sellers;bear the entire burden of the tax.;b.;the buyers;bear the entire burden of the tax.;c.;the burden of;the tax will be always be equally divided between the buyers and the sellers.;d.;the burden of;the tax will be shared by the buyers and the sellers, but the division of the;burden is not always equal.;52. If;a tax is levied on the buyers of sugar, then;a.;buyers will;bear the entire burden of the tax.;b.;sellers will;bear the entire burden of the tax.;c.;buyers and;sellers will share the burden of the tax.;d.;the;government will bear the entire burden of the tax.;53. If;the government passes a law requiring buyers of motorcycles to send $500 to the;government for every motorcycle they buy, then;a.;the demand;curve for motorcycles shifts downward by $500.;b.;buyers of;motorcycles pay $500 more per motorcycle than they were paying before the;tax.;c.;sellers of motorcycles;are unaffected by the tax.;d.;All of the;above are correct.;54. Suppose;buyers of liquor are required to send $1.00 to the government for every bottle;of liquor they buy. Further, suppose;this tax causes the effective price received by sellers of liquor to fall by;$0.80 per bottle. Which of the following;statements is correct?;a.;This tax;causes the demand curve for liquor to shift downward by $1.00 at each;quantity of liquor.;b.;The price;paid by buyers is $0.20 per bottle more than it was before the tax.;c.;Eighty;percent of the burden of the tax falls on sellers.;d.;All of the;above are correct.;55. Suppose;buyers of liquor are required to send $1.00 to the government for every bottle;of liquor they buy. Further, suppose;this tax causes the effective price received by sellers of liquor to fall by;$0.60 per bottle. Which of the following;statements is correct?;a.;This tax;causes the supply curve for liquor to shift upward by $1.00 at each quantity;of liquor.;b.;The price;paid by buyers is $0.40 per bottle more than it was before the tax.;c.;Sixty percent;of the burden of the tax falls on buyers.;d.;All of the;above are correct.;56. Suppose;there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay;the tax to the government. If the tax is;reduced from $50 per ticket to $30 per ticket, then;a.;the demand;curve will shift upward by $20, and the price paid by buyers will decrease by;less than $20.;b.;the demand;curve will shift upward by $20, and the price paid by buyers will decrease by;$20.;c.;the supply;curve will shift downward by $20, and the effective price received by sellers;will increase by less than $20.;d.;the supply;curve will shift downward by $20, and the effective price received by sellers;will increase by $20.;57. Suppose;there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay;the tax to the government. If the tax is;reduced from $50 per ticket to $30 per ticket, then;a.;the demand;curve will shift upward by $20, and the effective price received by sellers;will increase by $20.;b.;the demand;curve will shift upward by $20, and the effective price received by sellers;will increase by less than $20.;c.;the supply;curve will shift downward by $20, and the price paid by buyers will decrease;by $20.;d.;the supply;curve will shift downward by $20, and the price paid by buyers will decrease;by less than $20.;58. When;a tax is levied on buyers of tea;a.;buyers of tea;and sellers of tea both are made worse off.;b.;buyers of tea;are made worse off and the well-being of sellers is unaffected.;c.;buyers of tea;are made worse off and sellers of tea are made better off.;d.;the;well-being of both buyers of tea and sellers of tea is unaffected.;59. Which;of the following statements is correct concerning the burden of a tax imposed;on candles?;a.;Buyers bear;the entire burden of the tax.;b.;Sellers bear;the entire burden of the tax.;c.;Buyers and;sellers share the burden of the tax.;d.;We have to;know whether it is the buyers or the sellers that are required to pay the tax;to the government in order to make this determination.;60. Which;of the following is not correct?;a.;Taxes levied;on sellers and taxes levied on buyers are not equivalent.;b.;A tax places;a wedge between the price that buyers pay and the price that sellers receive.;c.;The wedge;between the buyers? price and the sellers? price is the same, regardless of;whether the tax is levied on buyers or sellers.;d.;In the new;after-tax equilibrium, buyers and sellers share the burden of the tax.;61. If;the government removes a tax on sellers of a good and imposes the same tax on;buyers of the good, then the price paid by buyers will;a.;increase and;the price received by sellers will increase.;b.;increase and;the price received by sellers will not change.;c.;not change;and the price received by sellers will increase.;d.;not change;and the price received by sellers will not change.;62. If;the government removes a tax on buyers of a good and imposes the same tax on;sellers of the good, then the price paid by buyers will;a.;not change;and the price received by sellers will not change.;b.;not change;and the price received by sellers will decrease.;c.;decrease and;the price received by sellers will not change.;d.;decrease and;the price received by sellers will decrease.;63. In;the final analysis, tax incidence;a.;depends on;the legislated burden.;b.;is entirely;random.;c.;depends on;the forces of supply and demand.;d.;falls;entirely on buyers or entirely on sellers.;64. If;the government removes a tax on a good, then the quantity of the good sold will;a.;increase.;b.;decrease.;c.;not change.;d.;All of the;above are possible.;65. If;the government removes a tax on a good, then the price paid by buyers will;a.;increase and;the price received by sellers will increase.;b.;increase and;the price received by sellers will decrease.;c.;decrease and;the price received by sellers will increase.;d.;decrease and;the price received by sellers will decrease.;66. Which;of the following causes a shortage of a good?;a.;a binding;price floor;b.;a binding;price ceiling;c.;a tax on the;good;d.;More than one;of the above is correct.;67. Which;of the following causes a surplus of a good?;a.;a binding;price floor;b.;a binding;price ceiling;c.;a tax on the;good;d.;More than one;of the above is correct.;68. Which;of the following causes the price paid by buyers to be different than the price;received by sellers?;a.;a binding;price floor;b.;a binding;price ceiling;c.;a tax on the;good;d.;More than one;of the above is correct.;69. The;price paid by buyers in a market will increase if the government;a.;increases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;floors;70. The;price paid by buyers in a market will increase if the government;a.;decreases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;imposes a;binding price ceiling in that market.;71. The;price paid by buyers in a market will decrease if the government;a.;increases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;72. The;price paid by buyers in a market will decrease if the government;a.;imposes a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;increases a;tax on the good sold in that market.;d.;decreases a;binding price floor in that market.;73. The;price received by sellers in a market will increase if the government;a.;decreases a;binding price floor in that market.;b.;decreases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;None of the;above is correct.;74. The;price received by sellers in a market will increase if the government;a.;decreases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;increases a;tax on the good sold in that market.;d.;imposes a;binding price ceiling in that market.;75. The;price received by sellers in a market will decrease if the government;a.;increases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;None of the;above is correct.;76. The;price received by sellers in a market will decrease if the government;a.;imposes a;binding price floor in that market.;b.;decreases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;increases a;binding price floor in that market.;77. The;quantity sold in a market will increase if the government;a.;decreases a;binding price floor in that market.;b.;decreases a;binding price ceiling in that market.;c.;increases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;78. The;quantity sold in a market will increase if the government;a.;decreases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;79. The;quantity sold in a market will decrease if the government;a.;decreases a;binding price floor in that market.;b.;decreases a;binding price ceiling in that market.;c.;decreases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;80. The;quantity sold in a market will decrease if the government;a.;decreases a;binding price floor in that market.;b.;increases a;binding price ceiling in that market.;c.;increases a;tax on the good sold in that market.;d.;More than one;of the above is correct.;Figure;6-9;81. Refer;to Figure 6-9. The equilibrium price;in the market before the tax is imposed is;a.;$1.;b.;$2.;c.;$5.;d.;$6.;82. Refer;to Figure 6-9. As the figure is;drawn, who sends the tax payment to the government?;a.;the buyers;b.;the sellers;c.;A portion of;the tax payment is sent by the buyers and the remaining portion is sent by;the sellers.;d.;The question;of who sends the tax payment cannot be determined from the figure.;83. Refer;to Figure 6-9. The price that buyers;pay after the tax is imposed is;a.;$5.;b.;$6.;c.;$7.;d.;$8.;84. Refer;to Figure 6-9. The effective price;that sellers receive after the tax is imposed is;a.;$5.;b.;$6.;c.;$7.;d.;$8.;85. Refer;to Figure 6-9. The amount of the tax;per unit is;a.;$1.;b.;$1.50.;c.;$2.;d.;$3.;86. Refer;to Figure 6-9. The burden of the tax;on buyers is;a.;$1 per unit.;b.;$1.50 per;unit.;c.;$2 per unit.;d.;$3 per unit.;87. Refer;to Figure 6-9. The burden of the tax;on sellers is;a.;$1 per unit.;b.;$1.50 per;unit.;c.;$2 per unit.;d.;$3 per unit.;88. Refer;to Figure 6-9. Suppose the same;supply and demand curves apply and a tax of the same amount per unit as shown;here is imposed. Now, however, the;sellers of the good, rather than the buyers, are required to pay the tax to the;government. Now, relative to the case;depicted in the figure;a.;the burden on;buyers will be larger and the burden on sellers will be smaller.;b.;the burden on;buyers will be smaller and the burden on sellers will be larger.;c.;the burden on;buyers will be the same and the burden on sellers will be the same.;d.;The relative;burdens in the two cases cannot be determined without further information.;89. Refer;to Figure 6-9. How much tax revenue;does this tax generate for the government?;a.;$150;b.;$180;c.;$250;d.;$300;Figure;6-10;90. Refer;to Figure 6-10. The price paid by;buyers after the tax is imposed is;a.;$8.;b.;$10.;c.;$14.;d.;$18.;91. Refer;to Figure 6-10. The effective price;received by sellers after the tax is imposed is;a.;$8.;b.;$10.;c.;$14.;d.;$18.;92. Refer;to Figure 6-10. The amount of the;tax per unit is;a.;$4.;b.;$5.;c.;$6.;d.;$10.;93. Refer;to Figure 6-10. The per-unit burden;of the tax is;a.;$4 on buyers;and $6 on sellers.;b.;$5 on buyers;and $5 on sellers.;c.;$6 on buyers;and $4 on sellers.;d.;$10 on buyers;and $0 on sellers.;94. Refer;to Figure 6-10. How much tax revenue;does this tax produce for the government?;a.;$480;b.;$600;c.;$800;d.;$1120;Figure;6-11;95. Refer;to Figure 6-11. The equilibrium;price in the market before the tax is imposed is;a.;$3.50.;b.;$5.;c.;$6.;d.;$7.;96. Refer;to Figure 6-11. As the figure is;drawn, who sends the tax payment to the government?;a.;the buyers;b.;the sellers;c.;A portion of;the tax payment is sent by the buyers and the remaining portion is sent by;the sellers.;d.;The question;of who sends the tax payment cannot be determined from the figure.;97. Refer;to Figure 6-11. The price paid by;buyers after the tax is imposed is;a.;$2.50.;b.;$3.50.;c.;$5.00.;d.;$6.00.;98. Refer;to Figure 6-11. The effective price;sellers receive after the tax is imposed is;a.;$2.50.;b.;$3.50.;c.;$5.00.;d.;$6.00.;99. Refer;to Figure 6-11. The amount of the;tax per unit is;a.;$1.;b.;$1.50.;c.;$2.50.;d.;$3.50.;100.Refer;to Figure 6-11. Buyers pay how much;of the tax per unit?;a.;$1.;b.;$1.50.;c.;$2.50.;d.;$3.50.;101.Refer;to Figure 6-11. Sellers pay how much;of the tax per unit?;a.;$1.00.;b.;$1.50.;c.;$2.50.;d.;$3.50.;102.Refer;to Figure 6-11. Suppose the same;supply and demand curves apply and a tax of the same amount per unit as shown;here is imposed. Now, however, the;buyers of the good, rather than the sellers, are required to pay the tax to the;government. Now, relative to the case;depicted in the figure;a.;the burden on;buyers will be larger and the burden on sellers will be smaller.;b.;the burden on;buyers will be smaller and the burden on sellers will be larger.;c.;the burden on;buyers will be the same and the burden on sellers will be the same.;d.;The relative;burdens in the two cases cannot be determined without further information.;103.Refer;to Figure 6-11. How much tax revenue;does this tax generate for the government?;a.;$75;b.;$125;c.;$175;d.;$300;Figure;6-12;104.Refer;to Figure 6-12. The price paid by;buyers after the tax is imposed is;a.;$3.;b.;$4.;c.;$5.;d.;$7.;105.Refer;to Figure 6-12. The effective price;received by sellers after the tax is imposed is;a.;$3.;b.;$4.;c.;$5.;d.;$7.;106.Refer;to Figure 6-12. For every unit of;the good that is sold;a.;sellers are;required to send one dollar to the government and buyers are required to send;two dollars to the government.;b.;sellers are required;to send two dollars to the government and buyers are required to send one;dollar to the government.;c.;sellers are;required to send three dollars to the government and buyers are required to;send nothing to the government.;d.;sellers are;required to send nothing to the government and buyers are required to send;two dollars to the government.;107.Refer;to Figure 6-12. Which of the;following is correct?;a.;One-fourth of;the burden of the tax falls on buyers and three-fourths of the burden of the;tax falls on sellers.;b.;One-third of;the burden of the tax falls on buyers and two-thirds of the burden of the tax;falls on sellers.;c.;One-half of;the burden of the tax falls on buyers and one-half of the burden of the tax;falls on sellers.;d.;Two-thirds of;the burden of the tax falls on buyers and one-third of the burden of the tax;falls on sellers.;108.Refer;to Figure 6-12. How much tax revenue;does this tax produce for the government?;a.;$24;b.;$30;c.;$32;d.;$56;Figure;6-13;The vertical;distance between points A and B represents the tax in the market.;109.Refer;to Figure 6-13. The price that;buyers pay after the tax is imposed is;a.;$8.;b.;$10.;c.;$16.;d.;$24.;110.Refer;to Figure 6-13. The effective price;that sellers receive after the tax is imposed is;a.;$6.;b.;$10.;c.;$16.;d.;$24.;111.Refer;to Figure 6-13. The amount of the;tax per unit is;a.;$6.;b.;$8.;c.;$14.;d.;$18.;112.Refer;to Figure 6-13. The per-unit burden;of the tax on buyers is;a.;$6.;b.;$8.;c.;$14.;d.;$24.;113.Refer;to Figure 6-13. The per-unit burden;of the tax on sellers is;a.;$6.;b.;$8.;c.;$10.;d.;$14.;Figure;6-14;114.Refer;to Figure 6-14. Suppose a tax of $2;per unit is imposed on this market. What;will be the new equilibrium quantity in this market?;a.;less than 50;units;b.;50 units;c.;between 50;units and 100 units;d.;greater than;100 units;115.Refer;to Figure 6-14. Suppose a tax of $2;per unit is imposed on this market. How;much will sellers receive per unit after the tax is imposed?;a.;$3;b.;between $3;and $5;c.;between $5;and $7;d.;$7;116.Refer;to Figure 6-14. Suppose a tax of $2;per unit is imposed on this market. How;much will buyers pay per unit after the tax is imposed?;a.;$3;b.;between $3;and $5;c.;between $5;and $7;d.;$7;117.Refer;to Figure 6-14. Suppose a tax of $2;per unit is imposed on this market.;Which of the following is correct?;a.;One-fourth of;the burden of the tax will fall on buyers and three-fourths of the burden of;the tax will fall on sellers.;b.;One-third of;the burden of the tax will fall on buyers and two-thirds of the burden of the;tax will fall on sellers.;c.;One-half of;the burden of the tax will fall on buyers and one-half of the burden of the;tax will fall on sellers.;d.;Two-thirds of;the burden of the tax will fall on buyers and one-third of the burden of the;tax will fall on sellers.;Figure;6-15;118.Refer;to Figure 6-15. Suppose a tax of $5;per unit is imposed on this market. What;will be the new equilibrium quantity in this market?;a.;less than 25;units;b.;25 units;c.;between 25;units and 50 units;d.;greater than;50 units;119.Refer;to Figure 6-15. Suppose a tax of $5;per unit is imposed on this market. How;much will sellers receive per unit after the tax is imposed?;a.;$5;b.;between $5;and $10;c.;between $10;and $14;d.;$14;120.Refer;to Figure 6-15. Suppose a tax of $5;per unit is imposed on this market. How;much will buyers pay per unit after the tax is imposed?;a.;$5;b.;between $5;and $10;c.;between $10;and $14;d.;$14;121.Refer;to Figure 6-15. Suppose a tax of $5;per unit is imposed on this market.;Which of the following is correct?;a.;Buyers and;sellers will share the burden of the tax equally.;b.;Buyers will;bear more of the burden of the tax than sellers will.;c.;Sellers will;bear more of the burden of the tax than buyers will.;d.;Any of the;above is possible.;122.The;federal government uses the revenue from the FICA (Federal Insurance;Contribution Act) tax to pay for;a.;unemployment;compensation.;b.;the salaries;of members of Congress.;c.;Social;Security and Medicare.;d.;housing;subsidies for low-income people.;123.The;Federal Insurance Contribution Act (FICA) tax is an example of;a.;a payroll;tax.;b.;a sales tax.;c.;a farm;subsidy.;d.;an income;subsidy.;124.A;payroll tax is a;a.;fixed number;of dollars that every firm must pay to the government for each worker that;the firm hires.;b.;tax that each;firm must pay to the government before the firm can hire workers and operate;its business.;c.;tax on the;wages that firms pay their workers.;d.;tax on all;wages above the minimum wage.;125.Congress;intended that;a.;the entire;FICA tax be paid by workers.;b.;the entire;FICA tax be paid by firms.;c.;one-quarter;of the FICA tax be paid by workers, and three-quarters be paid by firms.;d.;half the FICA;tax be paid by workers, and half be paid by firms.;126.Although;lawmakers legislated a fifty-fifty division of the payment of the FICA tax;a.;the actual;tax incidence is unaffected by the legislated tax incidence.;b.;the employer;now is required by law to pay more than 50 percent of the tax.;c.;the employee;now is required by law to pay more than 50 percent of the tax.;d.;employers are;no longer required by law to pay any portion of the tax.;127.When;a payroll tax is enacted;a.;the wage;received by workers falls and the wage paid by firms rises.;b.;the wage;received by workers falls and the wage paid by firms falls.;c.;the wage;received by workers rises and the wage paid by firms falls.;d.;the wage;received by workers rises and the wage paid by firms rises.;128.A;key lesson from the payroll tax is that the;a.;tax is a tax;solely on workers.;b.;tax is a tax;solely on firms that hire workers.;c.;tax;eliminates any wedge that might exist between the wage that firms pay and the;wage that workers receive.;d.;true burden;of a tax cannot be legislated.;129.Suppose;that in a particular market, the supply curve is highly elastic and the demand;curve is highly inelastic. If a tax is;imposed in this market, then;a.;the buyers;will bear a greater burden of the tax than the sellers.;b.;the sellers;will bear a greater burden of the tax than the buyers.;c.;the buyers;and sellers are likely to share the burden of the tax equally.;d.;the buyers;and sellers will not share the burden equally, but it is impossible to;determine who will bear the greater burden of the tax without more;information.;130.If;a tax is imposed on a market with inelastic demand and elastic supply, then;a.;buyers will;bear most of the burden of the tax.;b.;sellers will;bear most of the burden of the tax.;c.;the burden of;the tax will be shared equally between buyers and sellers.;d.;it is;impossible to determine how the burden of the tax will be shared.;131.Suppose;that the demand for picture frames is inelastic and the supply of picture;frames is elastic. A tax of $1 per frame;levied on picture frames will increase the price paid by buyers of picture;frames by;a.;less than;$0.50.;b.;$0.50.;c.;between $0.50;and $1.;d.;$1.;132.Suppose;that the demand for picture frames is inelastic and the supply of picture;frames is elastic. A tax of $1 per frame;levied on picture frames will decrease the effective price received by sellers;of picture frames by;a.;less than;$0.50.;b.;$0.50.;c.;between $0.50;and $1.;d.;$1.;133.In;which of these cases will the tax burden fall most heavily on buyers of the;good?;a.;The demand;curve is relatively steep and the supply curve is relatively flat.;b.;The demand;curve is relatively flat and the supply curve is relatively steep.;c.;The demand;curve and the supply curve are both relatively flat.;d.;The demand;curve and the supply curve are both relatively steep.;134.Buyers;of a good bear the larger share of the tax burden when a tax is placed on a;product for which;a.;the supply is;more elastic than the demand.;b.;the demand in;more elastic than the supply.;c.;the tax is;placed on the sellers of the product.;d.;the tax is;placed on the buyers of the product.;135.Suppose;that a tax is placed on books. If the;buyers pay the majority of the tax, then we know that the;a.;demand is;more inelastic than the supply.;b.;supply is;more inelastic than the demand.;c.;government;has required that buyers remit the tax payments.;d.;government;has required that sellers remit the tax payments.;136.Suppose;that in a particular market, the demand curve is highly elastic and the supply;curve is highly inelastic. If a tax is;imposed in this market, then;a.;the buyers;will bear a greater burden of the tax than the sellers.;b.;the sellers;will bear a greater burden of the tax than the buyers.;c.;the buyers;and sellers are likely to share the burden of the tax equally.;d.;the buyers;and sellers will not share the burden equally, but it is impossible to;determine who will bear the greater burden of the tax without more;information.;137.If;a tax is imposed on a market with inelastic supply and elastic demand, then;a.;buyers will;bear most of the burden of the tax.;b.;sellers will;bear most of the burden of the tax.;c.;the burden of;the tax will be shared equally between buyers and sellers.;d.;it is;impossible to determine how the burden of the tax will be shared.;138.Suppose;that the demand for picture frames is elastic and the supply of picture frames;is inelastic. A tax of $1 per frame;levied on picture frames will increase the price paid by buyers of picture;frames by;a.;less than;$0.50.;b.;$0.50.;c.;between $0.50;and $1.;d.;$1.;139.Suppose;that the demand for picture frames is elastic and the supply of picture frames;is inelastic. A tax of $1 per frame;levied on picture frames will decrease the effective price received by sellers;of picture frames by;a.;less than;$0.50.;b.;$0.50.;c.;between $0.50;and $1.;d.;$1.;140.In;which of these cases will the tax burden fall most heavily on sellers of the;good?;a.;The demand;curve is relatively steep and the supply curve is relatively flat.;b.;The demand;curve is relatively flat and the supply curve is relatively steep.;c.;The demand;curve and the supply curve are both relatively flat.;d.;The demand;curve and the supply curve are both relatively steep.;141.Sellers;of a good bear the larger share of the tax burden when a tax is placed on a;product for which;a.;the supply is;more elastic than the demand.;b.;the demand in;more elastic than the supply.;c.;the tax is;placed on the sellers of the product.;d.;the tax is;placed on the buyers of the product.;142.Suppose;that a tax is placed on books. If the;sellers pay the majority of the tax, then we know that the;a.;demand is;more inelastic than the supply.;b.;supply is;more inelastic than the demand.;c.;government;has required that buyers remit the tax payments.;d.;government;has required that sellers remit the tax payments.;143.The;demand for salt is inelastic and the supply of salt is elastic. The demand for caviar is elastic and the;supply of caviar is inelastic. Suppose;that a tax of $1 per pound is levied on the sellers of salt and a tax of $1 per;pound is levied on the buyers of caviar.;We would expect that most of the burden of these taxes will fall on;a.;sellers of;salt and the buyers of caviar.;b.;sellers of;salt and the sellers of caviar.;c.;buyers of;salt and the sellers of caviar.;d.;buyers of;salt and the buyers of caviar.;144.Suppose;the demand for macaroni is inelastic and the supply of macaroni is elastic, and;the demand for cigarettes is inelastic and the supply of cigarettes is;elastic. If a tax were levied on the;sellers of both of these commodities, we would expect that the;a.;burden of;both taxes would fall more heavily on the buyers than on the sellers.;b.;burden of the;macaroni tax would fall more heavily on the sellers than on the buyers, and;the burden of the cigarette tax would fall more heavily on the buyers than on;the sellers.;c.;burden of the;macaroni tax would fall more heavily on the buyers than on the sellers, and;the burden of the cigarette tax would fall more heavily on the sellers than;on the buyers.;d.;burden of;both taxes would fall more heavily on the sellers than on the buyers.;145.Which;of the following is correct?;a.;A tax burden;falls more heavily on the side of the market that is more elastic.;b.;A tax burden;falls more heavily on the side of the market that is less elastic.;c.;A tax burden;falls more heavily on the side of the market that is closer to unit elastic.;d.;A tax burden;is distributed independently of the relative elasticities of supply and;demand.;146.A;tax burden falls more heavily on the side of the market that;a.;has a fewer;number of participants.;b.;is more;inelastic.;c.;is closer to;unit elastic.;d.;is less;inelastic.;147.Which;of the following statements is true?;a.;A tax levied;on buyers will never be partially paid by sellers.;b.;Who actually;pays a tax depends on the price elasticities of supply and demand.;c.;Government;can decide who actually pays a tax.;d.;A tax levied;on sellers always will be passed on completely to buyers.;148.If;the government wants to reduce smoking, it should impose a tax on;a.;buyers of;cigarettes.;b.;sellers of;cigarettes.;c.;either buyers;or sellers of cigarettes.;d.;whichever;side of the market is less elastic.;Figure;6-16;Panel (a) Panel;(b);Panel (c);149.Refer;to Figure 6-16. In which market will;the majority of the tax burden fall on buyers?;a.;market (a);b.;market (b);c.;market (c);d.;All of the;above are correct.;150.Refer;to Figure 6-16. In which market will;the majority of the tax burden fall on sellers?;a.;market (a);b.;market (b);c.;market (c);d.;All of the;above are correct.

 

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