Devry ECO450 Week 8 Quiz

ECO 450 Week 8 QuizQuestion 1Housing construction is generally believed to be an industry of constant costs. In the long run, which of the following is true if a $10 per square foot tax on housing construction is collected directlyfrom builders?Question 2Which of the following is true about a lump-sum tax?Question 3The demand for medical care is very inelastic. If a 10-percent tax is levied on the sale of medical services and is collected from medical-care providers, then:Question 42 out of 2 pointsCurrently, a 10-cent per gallon tax is levied on gasoline consumption. The tax is increased to 20 cents per gallon. The excess burden of the tax will:AnswerQuestion 5Suppose an economy is comprised of only two markets: one for food and the other for housing. A tax on food used to finance transfer payments is likely to:AnswerQuestion 6A $0.30 per unit tax is imposed on a good that reduces the quantity supplied and demanded by 1000 units. What is the deadweight loss (ignore price elasticities)?AnswerQuestion 7The efficiency-loss ratio relative to tax is:AnswerQuestion 82 out of 2 pointsThe current price of compact discs, which are traded in perfectly competitive markets, is $10. A $1 per unit tax is levied on the discs. Annual record sales decline from five million to four million as a result of the tax. Assuming that the income effect of the tax-induced price change is negligible, the excess burden of the tax will be:AnswerQuestion 92 out of 2 pointsIf a lump-sum tax is imposed, the slope of the new budget line relative to the budget line prior to the tax:AnswerQuestion 10If the price elasticity of supply of labor is equal to 0.5 and the price elasticity of demand for labor is –2, then which of the following is likely to result from a tax on labor earnings?AnswerQuestion 11A lump-sum tax:AnswerQuestion 122 out of 2 pointsOther things being equal, the more inelastic the demand for a taxed good,AnswerQuestion 132 out of 2 pointsDifferential tax incidence measures the effect:AnswerQuestion 142 out of 2 pointsMost studies of tax incidence assume that taxes on labor income and other input services are borne entirely by the workers and other input owners that supply the services. This implies that the:AnswerQuestion 15Viewed from origin a price distorting tax creates a new budget line with a ______ slope relative to the budget line without the tax.AnswerQuestion 162 out of 2 pointsWhich of the following can contribute to a decrease in national saving?AnswerQuestion 17The total dollar value of the federal debt outstanding is:AnswerQuestion 18A government’s internal debt is:AnswerQuestion 19Other things being equal, a government budget surplus:AnswerQuestion 20The largest portion of the net federal debt outstanding is owed to:AnswerQuestion 212 out of 2 pointsWhich of the following is true about the federal government budget balance in the United States?AnswerQuestion 22The federal budget has been in deficit:AnswerQuestion 23As a result of government borrowing to cover deficits, citizens increase the supply of savings to provide themselves with funds to pay anticipated increases in future taxes. Then it follows that increased government borrowing will:AnswerQuestion 24The high employment deficit is estimated at $100 billion. Assuming that the economy is operating below full employment and that it will not overheat during the year,AnswerQuestion 25High-employment deficit or surplus is:AnswerQuestion 26The National Income and Product Accounts budget balance reflects:AnswerQuestion 270 out of 2 pointsA bond that is backed by the tolls collected from a bridge to be constructed from the proceeds of the bond is an example of:AnswerQuestion 282 out of 2 pointsThe debt of state and local governments is mostly:AnswerQuestion 292 out of 2 pointsEvidence of “crowding out” in the market for loanable funds at a rate of 8% could be:AnswerQuestion 302 out of 2 pointsThe federal government, its agencies, and the Federal Reserve System:Answer