Question

1- The larger the deadweight loss or taxation the

a, more people will choose to not buy the product.

B.more the burden of the tax will fall on the buyer and not the seller

c.larger the coat of any government program

d. more the burden of the tax will fall on the seller and not the buyer.

2- As size of a tax increases the deadweight loss from the tax the

A. declines.

b. No one knows how the deadweight loss changes because no tax has ever been reduced

c.remains constant.

D. Increase.

3- The CPI and the GDP deflator
A. generally move together b.generally show different patterns of movement. C. Always show identical changes. d always show different patterns movement.

4- technological advance in the produotion of computers will

a. increase consumer surplus in the market for computers and decrease producer surplus in

b, the market for computer software. increase producer wirplus in increase consumer surplus in the market for computers and

c. the market for computer software surplus in decrease consumer surplus in the markat for computers and increase producer the market for computer software.

d. decrease producer surplus in decrease consumer surplus in the market for computers the market for computer software.

5- If the tax on a good is doubled, the deadweight loss of the tax

a. increases by 50 percent.

b, doubles,

c. triples.

D. quadruples.

Answer 1

Answer 1 . The larger the dead weight loss or taxation the larger the cost of any government program. It means that the government should run costly program in there society. The government should collect higher taxes from the public to run there program.

Answer 2. As size of tax increases, the dead weight loss from increases because it means that producer surplus and consumer surplus has been declined and it is converted into dead weight loss.

Answer 3 . The CPI and GDP deflator are generally move together. As both shows the price of goods and services but the difference is that CPI shows quantity consumed price where as GDP deflator shows quantity produced and price domestically.

Answer 4. Technology advancement in the production of computer will market for computer software , increases producer surplus and increase in consumer surplus in the market for computer. It means that technology has reduced cost of production when price has been declined.

Answer 5 If the taxes on the good doubled , the dead weight loss of the tax increased by quardruplus. It means that if the taxes has been increased twice than area of dead weight triangle increased by 4 times.