Refer to Exhibit 4. If a tax is placed on the product in this market total surplus is the area ?

A. A + b + c + d+ e +f
B. A + b + c + d
C. A + d
D. B + c + e + f

Refer to Exhibit 4. Which of the following is true with regard to the burden of the tax in Exhibit 4 ?

A. The buyers pay a larger portion of the tax because demand is more inelastic than supply
B. The sellers pay a larger portion of the tax because supply is more elastic than demand
C. The buyers pay a larger portion of the tax because demand is more elastic then supply
D. The sellers pay a larger portion of the tax because supply is more inelastic than demand

A tax on petrol is likely to ?

A. Generate a deadweight loss that is unaffected by the time period over which it is measured
B. Cause a greater deadweight loss in the long run when compared to the short run
C. None of these answers
D. Cause a greater deadweight loss in the short run when compared to the long run.

Since the supply of undeveloped land is relatively inelastic a tax on undeveloped land would generate ?

A. A small deadweight loss and the burden of the tax would fall on the renter
B. A large deadweight loss and the burden of the tax would fall on the landlora
C. A large deadweight loss and the burden of the tax would fall on the renter.
D. A small deadweight loss and the burden of the tax would fall on the landlord

Refer to Exhibit 4. If a tax is placed on the product in this market, producer surplus is the area?

A. A + b + e
B. A + b + c + d
C. A
D. D

A tax system is regarded as horizontally equitable if ?

A. all taxpayers pay the same amount of tax
B. taxes on all goods are levied at the same rate
C. taxes are as low as possible
D. the system comprises only lump sum taxes

Which of the following taxes can be supported by the benefits principle of taxation ?

A. All these answers can be supported by the benefits principle of taxation
B. Progressive income taxes used to pay for national defense
C. Petrol taxes used to pay for roads
D. Property taxes used to pay for policies and the court system

Refer to Exhibit 4. If there is no tax placed on the product in this market, producer surplus is the area ?

A. A + b + e
B. D
C. C + f
D. C + d + f

The average tax rate is ?

A. Total taxes paid divided by total income
B. The extra taxes paid on an additional dollar or income.
C. The taxes paid by the marginal worker
D. Total income divided by total taxes paid

The ability-to-pay principle of taxation suggests that if a tax system is to be vertically equitable it should be ?

A. Efficient
B. Progressive
C. Regressive
D. Proportional