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 1 (2.0K)Refer to the graph above. When quantity supplied and quantity demanded are equal, consumer surplus is equal to: A) 600. B) 1200. C) 1400. D) 2000. 2 If price is lowered by a law from a market equilibrium value of \$5 to a lower value of \$4: A) both producer surplus and consumer surplus will increase. B) consumer surplus will increase and there will be some lost surplus. C) producer surplus will increase and there will be some lost surplus. D) there will be lost surplus as both producer surplus and consumer surplus decrease. 3 Use the following to answer questions 3-4: (3.0K)Refer to the graph above. Assume the market is initially in equilibrium at price P1. If government imposes a per unit tax equal to the distance from point a to point c in the graph, the welfare loss triangle from this tax is equal to area: A) cfg. B) beg. C) abc. D) bcd. 4 Refer to the graph above. Assume the market is initially in equilibrium at price P1. If government imposes a per unit tax equal to the distance from point a to point c in the graph, the lost producer surplus of this tax is equal to the area: A) P1(P2-t)ab. B) P1P2cb. C) abc. D) bcd. 5 Which of the following taxes best reflects the ability to pay principle of taxation? A) A tax on gasoline used to maintain roads and highways. B) Tax rates that increase as income increases. C) Tax rates that decrease as income increases. D) A property tax used to fund education. 6 (5.0K)Refer to the graph above. The price consumers pay increases by exactly the amount of the per-unit tax in graphs: A) A and D. B) B and C) C) C and D) D) B and D. 7 Suppose the equilibrium price of textbooks is \$40 a textbook. At that price, quantity of textbooks demanded and supplied is 25,000. If a \$6 tax per textbook paid by consumers increases equilibrium price to \$44 a textbook and reduces equilibrium quantity sold to 18,000, elasticity of demand is: A) 3.42 and elasticity of supply is 6.35. Consumers pay a larger portion of the tax. B) 0.29 and elasticity of supply is .16. Consumers pay a smaller portion of the tax. C) 1.4 and elasticity of supply is 2.16. Suppliers pay a larger portion of the tax. D) 0.7 and elasticity of supply is 46. Suppliers pay a smaller portion of the tax. 8 Given the same supply curve, the burden of a 10% tax on suppliers would be least on consumers within what price range? (1.0K) A) \$2 and \$4 B) \$4 and \$6 C) \$6 and \$8 D) \$8 and \$10. 9 Suppose elasticity of demand is 1, elasticity of supply is 2, and a 5% excise tax is levied on consumers. Which of the following changes will reduce the burden of the tax on consumers? A) Elasticity of demand falls to 0. B) Elasticity of demand rises to 2. C) Taxing authorities levy the tax on suppliers. D) Nothing will change the burden of the tax. 10 The less consumers respond to a change in price: A) the more sellers have to gain by restricting supply to raise price and total revenue. B) the less sellers have to gain by restricting supply to raise price and total revenue. C) the more sellers have to gain by raising supply to lower price and raise total revenue. D) the smaller will be the effect on total revenue of a change in price.