Exhibit 7-9 -When the Government Imposes a Tax That Must Be Paid

question 145

Multiple Choice

Exhibit 7-9
-When the government imposes a tax that must be paid by producers, economic theory indicates that the government's tax revenue

• A)comes from producers and consumers, though probably not in equal parts.
• B)comes from producers and consumers in equal parts.
• C)comes only from producers.
• D)comes only from consumers.
• E)is equal to the amount of deadweight loss.

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Definitions:

Dependent Variable

In statistical modeling, this is the variable that is being tested and measured to see if it is influenced by one or more independent variables.

Explanatory Variables

Variables in a statistical model that are used to explain changes or differences in a response variable.

T-Statistic

A value used in hypothesis testing, calculated as the difference between an observed sample mean and the population mean divided by the standard error of the mean.

Coefficient on Education

A statistical measure in regression that represents the change in the dependent variable resulting from a one-unit change in the level of education, all else being equal.