1) The supply curve
S1
and the demand curve
D indicate
initial conditions in the market for gasoline. A $.60-per-gallon excise tax on
gasoline is levied, which shifts the supply curve from
S1 to
S2.
Which of the following states the actual burden of the tax?
a. $.50 for buyers and $.10 for sellers
b. $.50 for sellers and $.10 for buyers
c. The entire $.60 falls on sellers.
d. The entire $.60 falls on buyers.
2.The supply curve S1
and the demand curve D indicate
initial conditions in the market for gasoline. A $.60-per-gallon excise tax on
gasoline is levied. How much revenue does the $.60-per-gallon tax generate for
the government?
a. $40 billion
b. $48 billion
c. $50 billion
d.$60 billion
1.
2) Joella is a third-grade public school teacher who doesn’t own a
car and uses public transportation. According to public choice theory, which of
the following four politicians for a public office would Joella be most likely
to vote for in the upcoming election?
a. Politician A proposes increasing the
property tax on personal automobiles and using the money to increase teacher
salaries by 10 percent.
b. Politician B proposes an across-the-board
increase in state income tax rates and using the money to increase the benefits
paid to unemployed workers.
c. Politician C proposes increasing the
property tax on personal automobiles and using the money to increase the
benefits paid to unemployed workers.
d. Politician D proposes an across-the-board
increase in state income tax rates and using the money to improve the highway
system.