Answer the following multiple choice;
7) Suppose that in Canada the g0vernment places a $1,500 tax on the sellers of new snowmobiles. After the sale of a new snowmobile, a seller must pay the government $1,500. How would the imposition of the tax on sellers be illustrated in a graph? A) The tax will shift the supply curve to the left by $1,5 00. B) The tax will shift the demand curve to the right by $1,500. C) The tax will shift both the demand and supply curve to the right by $1,500. D) The tax will shift the demand curve to the left by $l,500. 5+TAX I Q1 90 Q\": 05 8) To help pa}r for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. In the gure above what area represents the after-tax producer surplus? A) AacPo B) Aan1 C) [119112sz + :38sz D) 119sz Multiple Choice: 1) 2) 3) 4) 5) 6) How a sales tax is divided between buyers and sellers is determined by A) the government's choice of whom to tax. B) who the law says must pay the tax. C) the elasticities of supply and demand. D) the revenue needs of govennnent. The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. If a sales tax on sellers of the good is imposed, the tax is paid by A) only buyers. B) only sellers. C) both buyers and sellers. D) neither buyers nor sellers. The amount of a tax paid by the consumer will be larger the more the demand and the more the supply. A) elastic; inelastic B) inelastic; elastic C) inelastic; inelastic D) elastic; elastic Consider the market for heart transplants. The demand for a heart transplant is perfectly inelastic and the supply curve is upward sloping. If a $1,000 tax per transplant tax is imposed on buyers (the recipients), how will the tax be divided between the buyer and seller? A) The sellers will pay the entire tax. B) The buyers will pay the entire tax. C) The tax will be evenly divided between the sellers and buyers. D) More information is needed to determine how the tax is split. As long as the supply curve for a good is upward sloping and the demand curve is downward sloping, a sales tax imposed on consumers shifts the demand curve A) leftward and denitely raises the equilibrium price paid by consumers. B) rightward and denitely raises the equilibrium price paid by consumers. C) rightward and possibly increases the equilibrium quantity. D) rightward and denitely decreases the equilibrium quantity. When Congress passed a law that imposed a tax designed to fund its Social Security program it wanted employers and workers to share the burden of the tax equally. Most economists who have studied the incidence of the tax have concluded A) the tax is too high and social security program is over mded. B) the tax on employers is too high because it reduces the employment of lowskilled workers. C) the burden of the tax falls almost entirely on workers. D) the tax rate should be greater for high income workers than for low income workers
