ECO 450 Week 8 Quiz

Question 1

Housing construction is generally believed to be an industry of constant costs. In the long run, which of the following is true if a $10 per square foot tax on housing construction is collected directly
from builders?

Question 2

Which of the following is true about a lump-sum tax?

Question 3

The demand for medical care is very inelastic. If a 10-percent tax is levied on the sale of medical services and is collected from medical-care providers, then:

Question 4

2 out of 2 points

Currently, a 10-cent per gallon tax is levied on gasoline consumption. The tax is increased to 20 cents per gallon. The excess burden of the tax will:

Answer

Question 5

Suppose an economy is comprised of only two markets: one for food and the other for housing. A tax on food used to finance transfer payments is likely to:

Answer

Question 6

A $0.30 per unit tax is imposed on a good that reduces the quantity supplied and demanded by 1000 units. What is the deadweight loss (ignore price elasticities)?

Answer

Question 7

The efficiency-loss ratio relative to tax is:

Answer

Question 8

2 out of 2 points

The current price of compact discs, which are traded in perfectly competitive markets, is $10. A $1 per unit tax is levied on the discs. Annual record sales decline from five million to four million as a result of the tax. Assuming that the income effect of the tax-induced price change is negligible, the excess burden of the tax will be:

Answer

Question 9

2 out of 2 points

If a lump-sum tax is imposed, the slope of the new budget line relative to the budget line prior to the tax:

Answer

Question 10

If the price elasticity of supply of labor is equal to 0.5 and the price elasticity of demand for labor is –2, then which of the following is likely to result from a tax on labor earnings?

Answer

Question 11

A lump-sum tax:

Answer

Question 12

2 out of 2 points

Other things being equal, the more inelastic the demand for a taxed good,

Answer

Question 13

2 out of 2 points

Differential tax incidence measures the effect:

Answer

Question 14

2 out of 2 points

Most studies of tax incidence assume that taxes on labor income and other input services are borne entirely by the workers and other input owners that supply the services. This implies that the:

Answer

Question 15

Viewed from origin a price distorting tax creates a new budget line with a ______ slope relative to the budget line without the tax.

Answer

Question 16

2 out of 2 points

Which of the following can contribute to a decrease in national saving?

Answer

Question 17

The total dollar value of the federal debt outstanding is:

Answer

Question 18

A government’s internal debt is:

Answer

Question 19

Other things being equal, a government budget surplus:

Answer

Question 20

The largest portion of the net federal debt outstanding is owed to:

Answer

Question 21

2 out of 2 points

Which of the following is true about the federal government budget balance in the United States?

Answer

Question 22

The federal budget has been in deficit:

Answer

Question 23

As a result of government borrowing to cover deficits, citizens increase the supply of savings to provide themselves with funds to pay anticipated increases in future taxes. Then it follows that increased government borrowing will:

Answer

Question 24

The high employment deficit is estimated at $100 billion. Assuming that the economy is operating below full employment and that it will not overheat during the year,

Answer

Question 25

High-employment deficit or surplus is:

Answer

Question 26

The National Income and Product Accounts budget balance reflects:

Answer

Question 27

0 out of 2 points

A bond that is backed by the tolls collected from a bridge to be constructed from the proceeds of the bond is an example of:

Answer

Question 28

2 out of 2 points

The debt of state and local governments is mostly:

Answer

Question 29

2 out of 2 points

Evidence of “crowding out” in the market for loanable funds at a rate of 8% could be:

Answer

Question 30

2 out of 2 points

The federal government, its agencies, and the Federal Reserve System:

Answer

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ECO 450 Week 8 Quiz
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