The figure shows the market for books before and after a sales tax is introduced. The tax on books is ________ a book, buyers pay ______ of tax per book, and the governments tax revenue is ________a week.

£1.20; £0.80; £12
£1.20; £0.80; £128
£0.80; £1.20; £12
£0.40; £0.40; £4

The figure shows the market for books before and after a sales tax is introduced. Each week, the tax creates a deadweight loss of ________, decreases consumer surplus by ________ , and decreases producer surplus by _____________.

£3; £2; £1
£15; £10; £5
£3; £10; £5
£12; £8; £4

On Green Island, the demand for pencils is perfectly elastic and the supply of pencils is perfectly inelastic. If a sales tax on pencils is introduced, _____________________.

the tax is split evenly between the buyer and seller
the buyer pays the entire tax
the seller pays the entire tax
no one pays the tax

The government wants to increase its total revenue and plans to implement an additional sales tax. The government will raise more total revenue if it taxes _______ rather than _______.

air travel; clothing
pens; food
banking services; bus travel
toothpaste; toothbrushes

If sellers of prohibited goods are punished but buyers are not, then the price of a prohibited good _______ and the equilibrium quantity _______.

decreases; increases
increases; increases
increases; decreases
decreases; remains the same

The table gives the demand and supply schedules for fireworks on the Island of Big Bang. In the past, because many deaths have resulted from accidents involving fireworks, the government has banned fireworks and is enforcing the ban. A £3 a firework penalty on sellers of fireworks and no penalty on buyers will reduce the number of fireworks bought to ______ a week and increase the price to ______ a firework.

80; £5.50
0; an unknown amount
40; £6.50
140; £4.00

The table gives the demand and supply schedules for fireworks on the Island of Big Bang. In the past, because many deaths have resulted from accidents involving fireworks, the government has banned fireworks and is enforcing the ban. A £3 a firework penalty on buyers of fireworks and no penalty on sellers will reduce the number of fireworks bought to ________ a week and decrease the price to ______ a firework.

40; £4.00
80; £2.50
0; an unknown amount
140; £1.50

The table gives the demand and supply schedules for fireworks on the Island of Big Bang. In the past, because many deaths have resulted from accidents involving fireworks, the government has banned fireworks and is enforcing the ban. A £2.50 a firework penalty on buyers of fireworks and a £2 a firework penalty on sellers will reduce the number of fireworks bought to ______ a week and the price will be ____ a firework.

80; £3.50
40; £4.00
160; £5.50
0; an unknown amount

If the target price is consistantlt higher than the equilibrium price, the European Union __________.

has a shortage of agricultural products
sells more than it buys
makes the market for agricultural products efficient
buys more than it sells

Suppose that a sales tax is imposed on a good, but the price does not change. Such a situation will occur if the _______ the good is _______.

demand for; unit elastic
demand for; perfectly inelastic
supply of; perfectly elastic
demand for; perfectly elastic