Taxes Clicker Questions

Document created by Elizabeth Uva Employee on Mar 31, 2015Last modified by Elizabeth Uva Employee on Apr 1, 2015
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Which policy option do you think would be most effective at reducing electricity consumption?

 

A) Tax on electricity usage

B) Education about conservation

Can ask students prior to discussion of taxes and elasticity, than ask again after discussion

 

NOTE: In the next set of questions, the first question asks students to draw the supply and demand graph, which they must use in the follow-up clicker question. See Hoyt, et al, 2012 for discussion of this approach.

 

Use supply and demand graphs to show the effect of each policy (tax or education) on the market for electricity (note: treat the tax as an increase in production costs). Assume the demand for electricity is fairly inelastic while the supply is fairly elastic.

 


 

Assuming the demand for electricity is fairly inelastic and the supply is fairly elastic, which policy option would be more effective at reducing electricity usage?

 

A) Tax on electricity usage

B) Education about conservation

 


The City of San Diego is considering charging hotels a tax of $30 per room. What would you expect to see happen?

 

A) The price travelers pay for hotel rooms will go up by $30

B) Hotel revenue will go down by $30 per room

C) The price travelers pay for hotel rooms will go up but by less than $30

D) There isn't enough information given to answer this question.

 


Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell. Further, suppose this tax causes the price paid by buyers of liquor to rise by $0.20 per bottle. Which of the following statements is correct?

 

A) The tax creates a price floor at the higher price for buyers.

B) Supply of liquor must be more elastic than demand.

C) The incidence of the tax is on the sellers because they send the tax payments to the government.

D) Demand for liquor must be more elastic than supply

 


The San Diego City Council needs to raise revenue and is considering a tax on the following goods. Which would be the most efficient way to raise the most revenue?

 

A) Ben and Jerryís ice cream

B) Ballpoint pens

C) Food

D) Jewelry

[Use supply and demand graphs to explain your answer]

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