iVAT Chapter 7

A  transfer grouping

B  Rent seeking

C  transfer pricing

D  Consumer choice

E  Public Choice

A  Will transfer surplus from consumers to producers.

B  Will transfer surplus from producers or suppliers to consumers, but the price floor will not create deadweight loss.

C  Will not create deadweight loss because efficiencies will be realized.

D  Will transfer surplus from producers or suppliers to consumers.

A  The consumers will bear the greater portion of the tax.  This is due to the fact that the price elasticity of supply is less than the price elasticity of demand.

B  The suppliers or office building owners will bear the greater portion of the tax.  This is due to the fact that the price elasticity of supply is less than the price elasticity of demand.

C  The suppliers or office building owners will bear the greater portion of the tax.  The price elasticity of supply is greater than the price elasticity of demand.

D  The consumers will bear the greater portion of the tax. This is due to the fact that the price elasticity of supply is greater than the price elasticity of demand.

A  Red Bull will bear the majority of the excise tax due to the fact consumers have many substitutes in the energy drink market. Therefore, the price elasticity of demand is less than the price elasticity of supply.

B  Red Bull’s consumers will bear the majority of the excise tax due to the fact consumers do not have many substitutes in the energy drink market. Therefore, the price elasticity of demand is less than the price elasticity of supply.

C  None of the available answers.

D  Red Bull will bear the majority of the excise tax due to the fact consumers have many substitutes in the energy drink market. Therefore, the price elasticity of demand is greater than the price elasticity of supply.

A  The demand curve will shift down by the amount of the excise tax.

B  The demand curve will shift to the right by amount of the excise tax.

C  The demand curve will shift up by the amount of the excise tax.

D  The demand curve will become steeper.

A  The fraction of the tax borne by consumers will be 0.43.

B  The fraction of the tax borne by consumers will be 0.68.

C  The fraction of the tax borne by suppliers will be 0.32.

D  The fraction of the tax borne by suppliers will be 0.58.

A  The fraction of the tax borne by consumers will be 0.5.

B  The fraction of the tax borne by suppliers will be 0.6.

C  The fraction of the tax borne by consumers will be 0.6.

D  The fraction of the tax borne by suppliers will be 0.3.

A  All of the burden falls on consumers.

B  The tax burden on suppliers will be greater than the tax burden on consumers.

C  The tax burden on consumers will be greater than the tax burden on suppliers.

D  The tax burden on suppliers and the tax burden on consumers will be equal.

E  The tax burden on suppliers and the tax burden on consumers will not be equal.

A  The tax burden on consumers will be greater than the tax burden on suppliers.

B  Suppliers and the tax burden on consumers will be equal.

C  All of the burden falls on consumers.

D  All of the available answers are correct.

E  The tax burden on suppliers will be greater than the tax burden on consumers.

A  The supply curve shifts up because consumers attempt to pass the excise tax onto consumers in the form of higher prices.

B  The supply curve shifts up because suppliers attempt to pass the excise tax onto consumers in the form of higher prices.

C  The demand curve shifts up because consumers attempt to pass the excise tax onto suppliers in the form of higher prices.

D  The supply curve shifts down because suppliers attempt to pass the excise tax onto consumers in the form of higher prices.

A  The supply curve will shift up by the amount of the producer surplus.

B  The demand curve will shift up by the amount of the excise tax.

C  The supply curve will shift up by the amount of the excise tax.

D  The supply curve will down by the amount of the excise tax.

A  Increases by less than the amount of the per unit tax.

B  Decreases by less than the amount of the per unit tax.

C  Increases by the amount of the per unit tax.

D  Increases more than the amount of the per unit tax.

E  Plunges.

A  Transfer surplus from consumers and producers to the government.

B  Transfer surplus from the government to consumers.

C  Transfer surplus from the government to producers.

D  Transfer surplus from the government to consumers and producers.

A  Weight loss from a recession.

B  Efficiency weighted by price.

C  Loss of consumer surplus from a tax.

D  A loss of consumer and producer surplus from a tax.

E  Loss of producer surplus from a tax.

A  Because fewer transactions take place due to the artificially decreased prices.

B  Because there is an increase in the number of transactions that take place due to the artificially increased prices.

C  Because intervention in a market will increase overall surplus.

D  Because fewer transactions take place due to the artificially increased prices.

A  Consumers to the government.

B  Consumers to suppliers or producers in a market.

C  Consumers to other consumers in a market.

D  Suppliers to consumers in a market.

A  $15 worth of consumer surplus and $25 worth of producer surplus

B  $10 worth of consumer surplus and an unknown amount of producer surplus

C  $15 worth of consumer surplus and an unknown amount of producer surplus

D  $15 worth of producer surplus and an unknown amount of consumer surplus

E  $25 worth of consumer surplus and $15 worth of producer surplus

A  none of the available answers is correct

B  5.50

C  15.50

D  6.50

E  14.50

A  The area above the demand curve and above the equilibrium price.

B  The area below the demand curve and above the equilibrium price.

C  None of the available answers.

D  The area below the supply curve curve and above the equilibrium price.