Economics Question

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Deadweight loss (DWL) is a loss in total surplus meaning that both buyers and sellers are worse off.

Group of answer choices

TRUEFALSE

Flag question: Question 2Question 21 pts

Deadweight loss occurs when mutually beneficial transactions no longer take place because the tax distorts the prices that buyers pay and sellers receive.

Group of answer choices

TRUEFALSE

Flag question: Question 3Question 34 pts

Consumer surplus will 
 [ Select ]  [”
decrease”, ”
increase”, ”
stay the same”]
 after a tax is imposed on a market because some consumers will 
 [ Select ]  [”
leave”, ”
enter”]
 the market and the remaining consumers will receive 
 [ Select ]  [”
less”, ”
more”, ”
stay the same”]
 consumer surplus because the price they pay has 
 [ Select ]  [”
decreased”, ”
increased”, ”
stayed the same”]
 .

Flag question: Question 4Question 44 pts

Producer surplus will 
 [ Select ]  [”
decrease”, ”
increase”, ”
stay the same”]
 after a tax is imposed on a market because some producers will 
 [ Select ]  [”
leave”, ”
enter”, ”
stay in”]
the market and the remaining producers will receive 
 [ Select ]  [”
less”, ”
more”, ”
the same amount of”]
 producer surplus because the price they receive has 
 [ Select ]  [”
decreased”, ”
increased”, ”
stayed the same”]
 .

Flag question: Question 5Question 51 pts

Which of the following is not true?

Group of answer choices

THE REVENUE THAT THE GOVERNMENT COLLECTS FROM A TAX CAN BE FOUND BE TAKING THE PER-UNIT TAX MULTIPLIED BY THE QUANTITY SOLD AFTER THE TAX.THE REVENUE THAT THE GOVERNMENT COLLECTS FROM A TAX CAN BE FOUND BE SUBTRACTING THE PRICE THAT SELLERS RECEIVE FROM THE PRICE THAT BUYERS PAY MULTIPLIED BY THE QUANTITY SOLD AFTER THE TAX.

THE GOVERNMENT WILL ALWAYS RECEIVE MORE TAX REVENUE WHEN THEY INCREASE THE TAX.

Flag question: Question 6Question 63 pts

The deadweight loss will be smaller when supply and/or demand are more 
 [ Select ]  [”
elastic”, ”
inelastic”, ”
unit elastic”]
 because buyers and sellers are 
 [ Select ]  [”
less”, ”
more”]
 responsive to a change in price so the quantity exchanged will decrease by 
 [ Select ]  [”
zero”, ”
not much”, ”
a lot”]
 .

Flag question: Question 7Question 73 pts

The deadweight loss will be larger when supply and/or demand are more 
 [ Select ]  [”
elastic”, ”
inelastic”, ”
unit elastic”, ”
“]
 because buyers and sellers are 
 [ Select ]  [”
less”, ”
more”, ”
not at all”]
 responsive to a change in price so the quantity exchanged will decrease by 
 [ Select ]  [”
zero”, ”
not much”, ”
a lot”]
 .

Flag question: Question 8Question 81 pts

The size of the deadweight loss will decrease as the tax increases because the distortion in prices will cause more buyers and sellers to leave the market causing a large decrease in mutually beneficial transactions.

Group of answer choices

TRUEFALSE

Flag question: Question 9Question 91 pts

The tax revenue the government collects will increase a lot when a very large tax is imposed.

Group of answer choices

TRUEFALSE

Flag question: Question 10Question 105 pts

Please EXPLAIN the two factors that determine how large the deadweight loss will be (due to a tax being imposed on a market). Let me know if you need help with this one – I am happy to explain it.