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WorksheetsTaxes & Trade!
Total questions: 15
Worksheet time: 17mins
Name
Class
Date
1.
In the graph shown, S is the original supply curve and S1 is the supply curve including an excise tax. What is the area that represents the tax revenue to the government?
a)
P1, P3, V, T
b)
P2, P4, R, Z
c)
P2, P4, X, U
d)
P3, V, Q2, 0
2.
Suppose that the demand for soft drinks is price elastic and the supply is price inelastic. If the government imposes a sales tax on soft drinks, which of the following will occur in the short run?
a)
The tax burden will fall equally on producers & consumers
b)
The tax burden will fall more on producers
c)
The tax burden will fall more on consumers
d)
The government will collect $0 in tax revenue
3.
The world price is Pw is equal to $100. When the economy moves from autarky to free trade, consumer surplus rises by area ___ and producer surplus falls by area ___.
a)
B+K+L; B
b)
B+C+K+L; B+C+K+L
c)
C+H+I; B+C
d)
B+C+G+H+I+J+K+L; B+C
4.
The world price is Pw is equal to $100. The government imposes a tariff of $20/calculator. Compared to free trade, the tariff leads to a deadweight loss equal to area ___.
a)
K+L
b)
G+H+I+J
c)
G+J
d)
There is no deadweight loss created
5.
In the accompanying graph, consumer surplus WITHOUT trade is equal to area ___.
a)
W+X+Y
b)
W
c)
Y
d)
W+X
6.
In the accompanying graph, consumer surplus WITH trade is equal to area ___.
a)
W+X+Y
b)
W
c)
Y
d)
W+X
7.
In the accompanying graph, producer surplus WITHOUT trade is equal to area ___.
a)
Y
b)
X+Y+Z
c)
W+X+Y
d)
X+Y
8.
In the accompanying graph, producer surplus WITH trade is equal to area ___.
a)
Y
b)
X+Y+Z
c)
W+X+Y
d)
X+Y
9.
In the accompanying graph, consumer surplus WITHOUT trade is equal to area ___.
a)
W+X+Y
b)
Z
c)
W+X+Z
d)
W
10.
In the accompanying graph, consumer surplus WITH trade is equal to area ___.
a)
W+X+Y
b)
Z
c)
W+X+Z
d)
W
11.
In the accompanying graph, producer surplus WITHOUT trade is equal to area ___.
a)
X+Y+Z
b)
W+X+Y
c)
X+Y
d)
Y
12.
In the accompanying graph, producer surplus WITH trade is equal to area ___.
a)
X+Y+Z
b)
W+X+Y
c)
X+Y
d)
Y
13.
An excise tax collected from the producers of a good:
a)
Shifts the supply curve upward
b)
Creates deadweight loss
c)
Has a similar effect as a quota
d)
All of the above
14.
What is the price paid by consumers and the net price received by producers after the tax is paid, respectively?
a)
$11.00; $10.45
b)
$11.00; $10.00
c)
$10.45; $10.00
d)
$10.45; $9.45
15.
According to the diagram, what is the amount of the tax?
a)
$0
b)
$0.45
c)
$1.00
d)
$1.45
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