Question

Long lines

	a.	and discrimination according to seller bias are both inefficient rationing mechanisms because they both waste buyers’ time.
	b.	and discrimination according to seller bias are both inefficient rationing mechanisms because the good does not necessarily go to the buyer who values it most highly.
	c.	are an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly, and discrimination according to seller bias is an inefficient rationing mechanism because it wastes buyers’ time.
	d.	are an inefficient rationing mechanism because they waste buyers’ time, and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly.

1 points   

QUESTION 19

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

	a.	decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.
	b.	increase the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.
	c.	decrease the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.
	d.	increase the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.

1 points   

QUESTION 20

The tax incidence

	a.	is the manner in which the burden of a tax is shared among participants in a market.
	b.	can be shifted to the buyer by imposing the tax on the buyers of a product in a market.
	c.	can be shifted to the seller by imposing the tax on the sellers of a product in a market.
	d.	All of the above are correct.

1 points   

QUESTION 21

When a tax is placed on the sellers of energy drinks, the

	a.	buyers bear the entire burden of the tax.
	b.	burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.
	c.	burden of the tax will be always be equally divided between the buyers and the sellers.
	d.	sellers bear the entire burden of the tax.

Answer 1

1.

The answer is d

are an inefficient rationing mechanism because they waste buyers' time, and discrimination according to seller bias is an inefficient rationing mechanism because the good does not necessarily go to the buyer who values it most highly.

2.

The answer is a

decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.This is because the tax will shift the supply curve to the left and create a wedge between what consumers pay and what sellers receive.

3.

The answer is a

is the manner in which the burden of a tax is shared among participants in a market.

The tax incidence is how and who shares the burden of the tax in a given market.

4.

The answer is b.

burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

The burden of tax will depend on the elasticities of the demand and supply.