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Chapter 8—Application: The Costs of Taxation

MULTIPLE CHOICE

1. To fully understand how taxes affect economic well-being, what must we do?
a. assume that economic well-being is not affected if all tax revenue is spent on goods and
services for the Canadian public
b. know the dollar amount of all taxes raised in the country each year
c. compare the reduced welfare of buyers and sellers to the amount of government revenue
raised
d. compare the expenditures of the provincial governments with that of the federal
government
ANS: C PTS: 1 DIF: Average REF: 171-172
BLM: Remember NOT: Micro TB_8-1

2. What should be used to analyze economic well-being in an economy?


a. demand and supply
b. producer and consumer surplus
c. government spending and tax revenue
d. equilibrium price and quantity
ANS: B PTS: 1 DIF: Easy REF: 171-172
BLM: Remember NOT: Micro TB_8-2

3. When a tax is levied on a good, which of quantity sold and price will change?
a. The quantity of the good sold will decrease but the price of the good sold will not change.
b. The price of the good sold will increase but the quantity of the good sold will not change.
c. The quantity of the good sold will decrease but the price of the good sold will increase.
d. The price of the good sold will decrease but the quantity of the good sold will increase.
ANS: C PTS: 1 DIF: Challenging REF: 173-174
BLM: Remember NOT: Micro TB_8-3

4. What effect does a tax on a good have on prices?


a. It raises the price buyers pay and lowers the price sellers receive.
b. It raises both the price buyers pay and the price sellers receive.
c. It lowers both the price buyers pay and the price sellers receive.
d. It lowers the price buyers pay and raises the price sellers receive.
ANS: A PTS: 1 DIF: Challenging REF: 173-174
BLM: Remember NOT: Micro TB_8-4

5. When a good is taxed, who is worse off and who is better off?
a. Both buyers and sellers are worse off.
b. Buyers are worse off and sellers are better off.
c. Sellers are worse off and buyers are better off.
d. Both buyers and sellers are better off.
ANS: A PTS: 1 DIF: Average REF: 173-174
BLM: Remember NOT: Micro TB_8-5

Copyright © 2014 Nelson Education Limited. 8-1


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

6. What effect does a tax placed on a product have?


a. The price the buyer pays and the price the seller receives are higher.
b. The price the buyer pays and the price the seller receives are lower.
c. The price the buyer pays is lower and the price the seller receives is higher.
d. The price the buyer pays is higher and the price the seller receives is lower.
ANS: D PTS: 1 DIF: Challenging REF: 171
BLM: Remember NOT: Micro TB_8-6

7. Economic analysis uses which of the following to judge the effect of taxes on economic welfare?
a. government spending
b. consumer and producer surplus
c. equilibrium price and quantity
d. opportunity cost
ANS: B PTS: 1 DIF: Easy REF: 171
BLM: Remember NOT: Micro TB_8-7

8. What effect does a tax levied on the supplier of a product have?


a. It shifts the supply curve upward (or to the left).
b. It shifts the supply curve downward (or to the right).
c. It shifts the demand curve upward (or to the right).
d. It shifts the demand curve downward (or to the left).
ANS: A PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-8

9. What effect does a tax levied on the buyers of a product have?


a. It shifts the supply curve upward (or to the left).
b. It shifts the supply curve downward (or to the right).
c. It shifts the demand curve downward (or to the left).
d. It shifts the demand curve upward (or to the right).
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-9

10. If a tax is imposed on the buyer of a product, what is the effect on the demand curve?
a. It shifts downward by the amount of the tax.
b. It shifts upward by the amount of the tax.
c. It shifts downward by less than the amount of the tax.
d. It shifts upward by more than the amount of the tax.
ANS: A PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-10

Copyright © 2014 Nelson Education Limited. 8-2


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

11. What effect does a tax placed on kite buyers have?


a. It shifts demand upward, causing both the price received by sellers and the equilibrium
quantity to fall.
b. It shifts demand downward, causing both the price received by sellers and the equilibrium
quantity to fall.
c. It shifts supply downward, causing the price received by sellers to fall and equilibrium
quantity to rise.
d. It shifts supply upward, causing the price received by sellers to rise and equilibrium
quantity to fall.
ANS: B PTS: 1 DIF: Challenging REF: 172-173
BLM: Remember NOT: Micro TB_8-11

12. When will buyers of a product pay the majority of a tax placed on a product?
a. when the tax is placed on the seller of the product
b. when demand is more elastic than supply
c. when supply is more elastic than demand
d. when the tax is placed on the buyer of the product
ANS: C PTS: 1 DIF: Challenging REF: 172-173
BLM: Remember NOT: Micro TB_8-12

13. If a tax is imposed on a market with elastic demand and inelastic supply, who bears most of the burden
of the tax?
a. Buyers will bear most of the burden of the tax.
b. Sellers will bear most of the burden of the tax.
c. The burden of the tax will be shared equally between buyers and sellers.
d. The burden of the tax will be shared equally between buyers and the government.
ANS: B PTS: 1 DIF: Challenging REF: 177-179
BLM: Remember NOT: Micro TB_8-13

14. Suppose a tax is imposed on the buyers of a product. On whom will the burden of the tax fall?
a. On the buyers and the government
b. On the sellers and the government
c. On the buyers, sellers and the government
d. On the buyers and the sellers
ANS: D PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-14

15. Why does it NOT matter whether a tax is levied on the buyer or seller of the good?
a. because sellers always bear the full burden of the tax
b. because buyers always bear the full burden of the tax
c. because buyers and sellers will share the burden of the tax
d. because government bears the full burden of the tax
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-15

Copyright © 2014 Nelson Education Limited. 8-3


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

16. Suppose a tax is imposed on a market with an inelastic demand and an elastic supply. How is the
burden of the tax divided?
a. Sellers pay the majority of the tax.
b. Buyers pay the majority of the tax.
c. The tax burden is equally divided between buyers and sellers.
d. The tax burden is divided, but it cannot be determined how.
ANS: B PTS: 1 DIF: Challenging REF: 177-179
BLM: Remember NOT: Micro TB_8-16

17. When a tax is placed on the buyers of orange juice, what is the result?
a. The size of the orange juice market is reduced.
b. The price of orange juice decreases.
c. The supply of orange juice decreases.
d. The price of orange juice increases, and the equilibrium quantity of orange juice is
unchanged.
ANS: A PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-17

18. Which of the following outcomes will occur as a result of a tax, whether the tax is placed on the buyer
or the seller?
a. The size of the market is reduced.
b. The price the seller receives is higher.
c. The supply curve will shift upward.
d. The demand curve will shift upward.
ANS: A PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-18

19. When a tax is placed on the buyer of a product, what is the result?
a. Buyers pay less and sellers receive more.
b. Buyers pay less and sellers receive less.
c. Buyers pay more and sellers receive more.
d. Buyers pay more and sellers receive less.
ANS: D PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-19

20. When a tax is levied on a good, what is the effect on buyers and sellers, and who is worse off?
a. Buyers pay less, sellers receive less, and they are both worse off.
b. Buyers pay more, sellers receive more, and they are both worse off.
c. Buyers pay less, sellers receive more, and they are both worse off.
d. Buyers pay more, sellers receive less, and they are both worse off.
ANS: D PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-20

Copyright © 2014 Nelson Education Limited. 8-4


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

21. Who bears the burden of a tax imposed on gasoline?


a. Buyers bear the entire burden of the tax.
b. Sellers bear the entire burden of the tax.
c. Buyers and sellers share the burden of the tax.
d. The government bears the entire burden of the tax.
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-21

22. What will a tax placed on chocolate do to the equilibrium price and quantity?
a. It will reduce the equilibrium price of chocolate and increase the equilibrium quantity.
b. It will increase the equilibrium price of chocolate and reduce the equilibrium quantity.
c. It will increase the equilibrium price of chocolate and increase the equilibrium quantity.
d. It will reduce the equilibrium price of chocolate and reduce the equilibrium quantity.
ANS: B PTS: 1 DIF: Challenging REF: 172-173
BLM: Higher Order NOT: Micro TB_8-22

Figure 8-1

23. Refer to Figure 8-1. If the market is in equilibrium, what area represents consumer surplus?

a. A
b. B
c. C
d. D
ANS: B PTS: 1 DIF: Easy REF: 172-173
BLM: Higher Order NOT: Micro TB_8-23

24. Refer to Figure 8-1. When the market is in equilibrium, what area represents producer surplus?

a. A +B
b. B+C
c. C+D
d. A+D
ANS: C PTS: 1 DIF: Easy REF: 172-173
BLM: Higher Order NOT: Micro TB_8-24

Copyright © 2014 Nelson Education Limited. 8-5


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

25. Refer to Figure 8-1. Which area represents total economic surplus?
a. A + B
b. B + C
c. C + D
d. A + D
ANS: B PTS: 1 DIF: Average REF: 172-173
BLM: Higher Order NOT: Micro TB_8-25

26. When a tax is levied on the sellers of a good, what happens to the supply curve?
a. It shifts left (up) by less than the tax.
b. It shifts right (down) by less than the tax.
c. It shifts left (up) by an amount equal to the tax.
d. It shifts right (down) by an amount equal to the tax.
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-26

27. When a tax is levied on the sellers of a good, how does the supply curve shift?
a. up by the amount of the tax
b. down by the amount of the tax
c. up by more than the tax
d. down by less than the tax
ANS: A PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-27

28. Suppose a $2 tax is placed on the sellers of potting soil. How will the supply curve shift?
a. right (downward) by exactly $2
b. left (upward) by less than $2
c. left (upward) by exactly $2
d. right (downward) by less than $2
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Higher Order NOT: Micro TB_8-28

29. How is tax burden related to the elasticity of the market?


a. A tax burden falls most heavily on the side of the market that is elastic.
b. A tax burden falls most heavily on the side of the market that is inelastic.
c. A tax burden falls most heavily on the side of the market that is closer to unit elastic.
d. A tax burden is distributed independently of relative elasticities of supply and demand.
ANS: B PTS: 1 DIF: Challenging REF: 172-173
BLM: Higher Order NOT: Micro TB_8-29

30. When a tax on a good is enacted, who bears the burden of the tax?
a. Buyers and sellers share the burden of the tax regardless of whom it is levied on.
b. Buyers always bear the full burden of the tax.
c. Sellers always bear the full burden of the tax.
d. Sellers bear the full burden if the tax is levied on them, but buyers bear the full burden if
the tax is levied on them.
ANS: A PTS: 1 DIF: Challenging REF: 172-173
BLM: Remember NOT: Micro TB_8-30

Copyright © 2014 Nelson Education Limited. 8-6


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

31. What does a tax placed on a good do?


a. It causes the price of the good to fall.
b. It affects buyers of the good, but not sellers.
c. It causes the size of the market for the good to shrink.
d. It affects sellers of the good, but not buyers.
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-31

32. When a tax is levied on a good, what happens to the market price and why?
a. The market price falls because quantity demanded falls.
b. The market price falls because quantity supplied falls.
c. The market price rises because both quantity demanded and quantity supplied falls.
d. The market price rises because both quantity demanded and quantity supplied rises.
ANS: C PTS: 1 DIF: Average REF: 172-173
BLM: Remember NOT: Micro TB_8-32

33. How is the benefit received by buyers in the market measured?


a. by the demand curve
b. by consumer surplus
c. by the amount buyers are willing to pay for the good
d. by the equilibrium price
ANS: B PTS: 1 DIF: Easy REF: 172-173
BLM: Remember NOT: Micro TB_8-33

34. How is the benefit received by the government from a tax measured?
a. by deadweight loss
b. by tax revenue
c. by equilibrium price
d. by equilibrium quantity
ANS: B PTS: 1 DIF: Easy REF: 172-173
BLM: Remember NOT: Micro TB_8-34

35. How is the benefit received by sellers in a market measured?


a. by the supply curve
b. by producer surplus
c. by the amount sellers receive for their product
d. by the sellers' costs
ANS: B PTS: 1 DIF: Easy REF: 174
BLM: Remember NOT: Micro TB_8-35

Copyright © 2014 Nelson Education Limited. 8-7


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

36. How is the benefit from a tax measured?


a. by the benefit received by those people who gain from government's expenditure of the tax
revenue
b. by the cost of collecting (administering) the tax
c. by the interest saved because the government did not borrow the funds
d. by the government's surplus, which is tax revenue minus government expenditures
ANS: A PTS: 1 DIF: Average REF: 174
BLM: Remember NOT: Micro TB_8-36

37. When a tax is imposed on a product, what happens to quantity demanded and quantity supplied?
a. Quantity demanded will increase and quantity supplied will decrease.
b. Quantity demanded will decrease and quantity supplied will increase.
c. Quantity demanded and quantity supplied will both increase.
d. Quantity demanded and quantity supplied will both decrease.
ANS: D PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-37

Figure 8-2

38. Refer to Figure 8-2. What is the equilibrium price and quantity before the tax?
a. P1 and Q1
b. P2 and Q2
c. P3 and Q1
d. P3 and Q2
ANS: B PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-38

39. Refer to Figure 8-2. What is the price paid and quantity supplied after the tax?
a. P1 and Q1
b. P2 and Q2
c. P3 and Q1
d. P3 and Q2
ANS: C PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-39

Copyright © 2014 Nelson Education Limited. 8-8


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

40. Refer to Figure 8-2. What is the price sellers receive after the tax?
a. P1
b. P2
c. P3 – P1
d. P3 – P2
ANS: A PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-40

41. Refer to Figure 8-2. What is the per unit burden of the tax on buyers?
a. (P3 – P1) / (Q2 – Q1)
b. P3 – P2
c. (P2 – P1) / (Q2 – Q1)
d. P2 – P1
ANS: B PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-41

42. Refer to Figure 8-2. What is the per-unit burden of the tax on the sellers?
a. (P3 – P1)/(Q2 – Q1)
b. P3 – P2
c. (P2 – P1)/(Q2 – Q1)
d. P2 – P1
ANS: D PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-42

43. Refer to Figure 8-2. What is the amount of the tax imposed?
a. P3 – P1
b. P3
c. P2 – P1
d. P2
ANS: A PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-43

44. Refer to Figure 8-2. What area represents the amount of tax revenue received by the government?
a. P3ACP1
b. ABC
c. P2DAP3
d. P1CDP2
ANS: A PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-44

45. Refer to Figure 8-2. What area represents the amount of deadweight loss associated with the tax?
a. P3ACP1
b. ABC
c. P2DAP3
d. P1CDP2
ANS: B PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-45

Copyright © 2014 Nelson Education Limited. 8-9


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

46. Suppose the government places a tax on a product. How does the cost of the tax compare with the
revenue raised?
a. The cost of the tax to buyers and sellers is less than the revenue raised from the tax by the
government.
b. The cost of the tax to buyers and sellers equals the revenue raised from the tax by the
government.
c. The cost of the tax to buyers and sellers exceeds the revenue raised from the tax by the
government.
d. Without additional information, such as the elasticity of demand for this product, it is
impossible to compare tax cost with tax revenue.
ANS: C PTS: 1 DIF: Challenging REF: 174-175
BLM: Remember NOT: Micro TB_8-46

47. When a tax is imposed on a good, what do we know about the losses to buyers and sellers?
a. They are equal to the revenue raised by the government.
b. They are less than the revenue raised by the government.
c. They exceed the revenue raised by the government.
d. They cannot be compared to the tax revenue raised by the government since the amount of
the tax will vary from good to good.
ANS: C PTS: 1 DIF: Challenging REF: 174-175
BLM: Remember NOT: Micro TB_8-47

48. What does deadweight loss measure?


a. the loss in a market to buyers and sellers that is not offset by an increase in government
revenue
b. the loss in revenue to the government when buyers choose to buy less of the product
c. the loss of efficiency in a market as a result of government intervention
d. the lost revenue to businesses because of higher prices to consumers from the tax
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Remember NOT: Micro TB_8-48

49. What is the loss in total surplus resulting from a tax called?
a. a deficit
b. economic loss
c. deadweight loss
d. inefficiency
ANS: C PTS: 1 DIF: Easy REF: 174-175
BLM: Remember NOT: Micro TB_8-49

50. What does deadweight loss represent?


a. the reduction in total surplus that results from a tax
b. the loss of profit to businesses when a tax is imposed
c. the reduction in consumer surplus when a tax is placed on buyers
d. the decline in government revenue when taxes are reduced in a market
ANS: A PTS: 1 DIF: Easy REF: 174-175
BLM: Remember NOT: Micro TB_8-50

Copyright © 2014 Nelson Education Limited. 8-10


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

51. Why does a tax have a deadweight loss?


a. because it induces the government to spend more
b. because it induces buyers to consume less and sellers to produce less
c. because it causes a disequilibrium in the market
d. because the loss to buyers is greater than the loss to sellers
ANS: B PTS: 1 DIF: Average REF: 175-176
BLM: Remember NOT: Micro TB_8-51

52. What happens if the deadweight loss of taxation grows larger?


a. the larger the deadweight loss of taxation, the more people will choose to not buy the
product
b. the larger the deadweight loss of taxation, the more the burden of the tax will fall on the
buyer and not the seller
c. the larger the deadweight loss of taxation, the more the burden of the tax will fall on the
seller and not the buyer
d. the larger the deadweight loss of taxation, the larger the cost of any government program
ANS: D PTS: 1 DIF: Average REF: 175-176
BLM: Remember NOT: Micro TB_8-52

53. When evaluating the size of the deadweight loss due to a tax, what do we know?
a. the greater the elasticities of supply and demand, the greater the deadweight loss
b. the smaller the elasticities of supply and demand, the greater the deadweight loss
c. the smaller the decrease in both quantity demanded and quantity supplied, the greater the
deadweight loss
d. the greater the elasticities of supply and demand, the smaller the deadweight loss
ANS: A PTS: 1 DIF: Average REF: 177
BLM: Remember NOT: Micro TB_8-53

54. How is the amount of deadweight loss that will result from a tax determined?
a. by the price elasticity of demand and supply
b. by the number of buyers of the product in the market
c. by the number of suppliers of the product in the market
d. by the percentage of the purchase price that the tax represents
ANS: A PTS: 1 DIF: Average REF: 177
BLM: Remember NOT: Micro TB_8-54

55. Assume that the demand for pretzels is relatively inelastic and that the demand for potato chips is
relatively elastic. If the same percentage tax were placed on both goods, the tax on which product
would create a larger deadweight loss?
a. pretzels, if the supply of the pretzels is also relatively inelastic
b. potato chips, if the supply of the potato chips is also relatively elastic
c. pretzels, if the supply of the pretzels is relatively elastic
d. potato chips, if the supply of the potato chips is relatively inelastic
ANS: B PTS: 1 DIF: Average REF: 177
BLM: Higher Order NOT: Micro TB_8-55

Copyright © 2014 Nelson Education Limited. 8-11


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

Figure 8-3

56. Refer to Figure 8-3. What is the equilibrium price before the tax?
a. $8
b. $10
c. $16
d. $24
ANS: C PTS: 1 DIF: Easy REF: 174
BLM: Higher Order NOT: Micro TB_8-56

57. Refer to Figure 8-3. What is the price that will be paid after the tax?
a. $8
b. $10
c. $16
d. $24
ANS: D PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-57

58. Refer to Figure 8-3. What is the price sellers receive after the tax?
a. $8
b. $10
c. $14
d. $24
ANS: B PTS: 1 DIF: Average REF: 174
BLM: Higher Order NOT: Micro TB_8-58

59. Refer to Figure 8-3. What is the per-unit burden of the tax on buyers?
a. $6
b. $8
c. $14
d. $16
ANS: B PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-59

Copyright © 2014 Nelson Education Limited. 8-12


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

60. Refer to Figure 8-3. What is the amount of the tax imposed?
a. $6
b. $8
c. $14
d. $16
ANS: C PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-61

61. Refer to Figure 8-3. What is the amount of tax revenue received by the government?
a. $210
b. $420
c. $560
d. $980
ANS: D PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-62

62. Refer to Figure 8-3. What is the amount of deadweight loss as a result of the tax?
a. $210
b. $420
c. $560
d. $980
ANS: A PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-63

63. Refer to Figure 8-3. What is the per-unit burden of the tax on the sellers?
a. $6
b. $8
c. $14
d. $16
ANS: A PTS: 1 DIF: Challenging REF: 174
BLM: Higher Order NOT: Micro TB_8-60

Figure 8-4

Copyright © 2014 Nelson Education Limited. 8-13


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

64. Refer to Figure 8-4. What is the equilibrium market price and quantity before the tax is imposed?
a. P1 and Q1
b. P2 and Q2
c. P3 and Q1
d. P1 and Q2
ANS: A PTS: 1 DIF: Easy REF: 174-175
BLM: Higher Order NOT: Micro TB_8-64

65. Refer to Figure 8-4. What is the price buyers pay after the tax and the quantity buyers receive?
a. P1 and Q1
b. P2 and Q2
c. P3 and Q2
d. P3 and Q1
ANS: C PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-65

66. Refer to Figure 8-4. What is the price sellers receive after the tax and the quantity sold?
a. P1 and Q1
b. P2 and Q2
c. P3 and Q2
d. P2 and Q1
ANS: B PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-66

67. Refer to Figure 8-4. Which area represents consumer surplus before the tax was levied?
a. A
b. A +B
c. A + B + C
d. D + E + F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-67

68. Refer to Figure 8-4. Which area represents producer surplus before the tax?
a. A
b. A + B + C
c. D + E
d. D + E + F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-68

69. Refer to Figure 8-4. Which area represents consumer surplus after the tax is levied on the consumer?
a. A
b. A + B
c. A + B + C
d. D + E + F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-70

Copyright © 2014 Nelson Education Limited. 8-14


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

70. Refer to Figure 8-4. Which area represents producer surplus after the tax is levied on the consumer?
a. A
b. A + B + C
c. D + E
d. F
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-71

71. Refer to Figure 8-4. Which area represents producer surplus after the tax is levied on the consumer?
a. A
b. A + B + C
c. D + E
d. F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-72

72. Refer to Figure 8-4. Assume the tax was levied on the consumer. Which area represents a reduction in
consumer surplus?
a. A
b. B + C
c. C + E
d. D + E
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-73

73. Refer to Figure 8-4. Assume the tax was levied on the producer. Which area represents a reduction in
consumer surplus?
a. A
b. B + C
c. C + E
d. D + E
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-74

74. Refer to Figure 8-4. Assume the tax was levied on the consumer. Which area represents a reduction in
producer surplus?
a. A
b. B + C
c. D + E
d. D + E + F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-75

Copyright © 2014 Nelson Education Limited. 8-15


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

75. Refer to Figure 8-4. Which area represents the benefit to the government (total tax revenue)?
a. A + B
b. B + D
c. B + D + F
d. D + F
ANS: B PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-76

76. Refer to Figure 8-4. Which area represents the total surplus (consumer, producer, and government)
with the tax?
a. A + B + C
b. A + B + D
c. A + B + D + F
d. D + E + F
ANS: C PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-77

77. Refer to Figure 8-4. Which area represents the loss in total welfare resulting from the levying of the
tax on the buyer?
a. A + B + C
b. D + E + F
c. A + B + D + F
d. C + E
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-78

78. Refer to Figure 8-4. Which area represents the loss in total welfare resulting from the levying of the
tax on the seller?
a. A + B + C
b. A + B D + F
c. C + E
d. D + E + F
ANS: C PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-79

79. Refer to Figure 8-4. Which area represents the loss in total welfare resulting from the levying of the
tax on the seller?
a. A + B + C
b. A + B D + F
c. C + E
d. D + E + F
ANS: A PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-69

Copyright © 2014 Nelson Education Limited. 8-16


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

Figure 8-5

80. Refer to Figure 8-5. Without the tax, what would the equilibrium price and quantity be?
a. $6 and 300
b. $10 and 300
c. $10 and 600
d. $16 and 300
ANS: C PTS: 1 DIF: Easy REF: 174-175
BLM: Higher Order NOT: Micro TB_8-80

81. Refer to Figure 8-5. Without the tax, what would consumer surplus in this market be?
a. $1500
b. $2400
c. $3000
d. $3600
ANS: D PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-81

82. Refer to Figure 8-5. Without the tax, what would producer surplus in this market be?
a. $1500
b. $2400
c. $3000
d. $3600
ANS: B PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-82

83. Refer to Figure 8-5. Without the tax, what would total surplus in this market be?
a. $2400
b. $3000
c. $3600
d. $6000
ANS: D PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-83

Copyright © 2014 Nelson Education Limited. 8-17


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

84. Refer to Figure 8-5. If the tax is imposed in this market, what would be the price buyers would now
pay for the good?
a. $2
b. $6
c. $10
d. $16
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-84

85. Refer to Figure 8-5. If the tax is imposed on the buyer, what would be the price buyers would now pay
for the good?
a. $2
b. $6
c. $10
d. $16
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-85

86. Refer to Figure 8-5. If the tax is imposed on the seller, what would be the price buyers would now pay
for the good?
a. $2
b. $6
c. $10
d. $16
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-86

87. Refer to Figure 8-5. If the tax is imposed in this market, what would be the price sellers would receive
for their product?
a. $2
b. $6
c. $10
d. $16
ANS: B PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-87

88. Refer to Figure 8-5. If the tax is imposed on the buyer, what would be the price sellers would receive
for their product?
a. $2
b. $6
c. $10
d. $16
ANS: B PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-88

Copyright © 2014 Nelson Education Limited. 8-18


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

89. Refer to Figure 8-5. If the tax is imposed on the seller, what would be the price sellers would receive
for their product?
a. $2
b. $6
c. $10
d. $16
ANS: B PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-89

90. Refer to Figure 8-5. If the tax is imposed in this market, what would consumer surplus be?
a. $600
b. $900
c. $1500
d. $2200
ANS: B PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-90

91. Refer to Figure 8-5. If the tax is imposed on the buyer, what would consumer surplus be?
a. $600
b. $900
c. $1500
d. $2200
ANS: B PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-91

92. Refer to Figure 8-5. If the tax is imposed on the seller, what would consumer surplus be?
a. $600
b. $900
c. $1500
d. $2200
ANS: B PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-92

93. Refer to Figure 8-5. If the tax is imposed in this market, what would producer surplus be?
a. $600
b. $900
c. $1200
d. $1500
ANS: A PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-93

94. Refer to Figure 8-5. If the tax is imposed on the buyer, what would producer surplus be?
a. $600
b. $900
c. $1200
d. $1500
ANS: A PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-94

Copyright © 2014 Nelson Education Limited. 8-19


Test Bank Chapter 8 Microeconomics Mankiw 6Ce

95. Refer to Figure 8-5. If the tax is imposed on the seller, what would producer surplus be?
a. $600
b. $900
c. $1200
d. $1500
ANS: A PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-95

96. Refer to Figure 8-5. When the tax is placed on this good, what are the quantity sold and the price
buyers will pay?
a. 300 and buyers will still pay $10
b. 600 and buyers will still pay $10
c. 300 and buyers will now pay $16
d. 600 and buyers will now pay $16
ANS: C PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-96

97. Refer to Figure 8-5. If the government imposes the tax in this market, what will the tax revenue be?
a. $600
b. $900
c. $1500
d. $3000
ANS: D PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-97

98. Refer to Figure 8-5. What is the amount of the tax placed on this product?
a. $4
b. $6
c. $8
d. $10
ANS: D PTS: 1 DIF: Average REF: 174-175
BLM: Higher Order NOT: Micro TB_8-98

99. Refer to Figure 8-5. What would total surplus with a tax imposed in this market be?
a. $1500
b. $3600
c. $4500
d. $6000
ANS: C PTS: 1 DIF: Challenging REF: 174-175
BLM: Higher Order NOT: Micro TB_8-99

Copyright © 2014 Nelson Education Limited. 8-20


Another random document with
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future of poverty and debt before him if he marries without a fortune.
I can save him from all this. I am rich enough for both. Say that you
will not stand in my way. I will remove the only obstacle in his path. I
will give up everything. I will stay in this tedious land for his sake. He
shall pursue any career he chooses. Think well what it is to rob such
a man of his only chance of fortune and ease. For if he does not
marry me, he will certainly marry you.”
Olivia sat upright in her chair completely dazed. She forgot to be
indignant. For the first time the truth enunciated by Madame Koller
came home to her. Pembroke was poor. He was extravagant. He
was bent upon entering politics. Olivia had, as most women, a
practical sympathy. She knew very well the horrors of poverty for
such a man, and her portion would be but small.
Madame Koller, seeing that she had made her impression, waited
—and after a while continued. Her voice was low and very sweet.
She seemed pleading for Pembroke’s salvation.
“Pembroke, you know, is already deeply in debt. He cannot
readily accommodate himself to the style of provincial living here. He
would say all these things are trifles. I tell you, Olivia Berkeley, they
are not trifles. They are second nature. Is it not cruel of God to make
us so dependent on these wretched things? It was for these same
wretched things that I endured torture for years—for money and
clothes and carriages—just such things as that.”
Olivia by a great effort recovered herself.
“What you say is true, Madame Koller. But I will not—how can
you ask me such things about a man who has never—never”—she
stopped at a loss to express her meaning, which implied a reproach
at Madame Koller’s want of delicacy.
Madame Koller made a gesture of impatience.
“What are promises?” she cried. “Nevertheless, I want you to see
that if you marry Pembroke it will be his ruin. It would be most wicked
selfishness.”
“Madame Koller,” answered Olivia, rising, “I will not listen to any
more.”
“I have nothing more to say,” responded Madame Koller, rising
too, and drawing her cloak around her. “I did not expect more from
you than conventional tolerance. Had you a heart you would have
felt for me—for him—for yourself. Can you conceive of anything
more noble, or more piteous than two women, one of whom must
make a great sacrifice for the man they both love—come, you need
not deny it, or lose your temper—because I see you have a temper.”
Olivia’s air and manner did certainly indicate dangerous possibilities.
“I repeat, of two women as we are, the one makes the sacrifice—the
other feels it to the quick. You talk though like a boarding-school
miss. You might have got all the phrases you have used out of a
book of deportment.”
“I am as sincere as you are, Madame Koller,” answered Olivia, in
a voice of restrained anger. “I cannot help it that I am more reserved.
I could no more say what you have said—” here a deep flush came
into Olivia’s face—“than I could commit murder.”
Madame Koller stood up, and as she did so, she sighed deeply.
Olivia, for the first time, felt sorry for her.
“Women who love are foolish, desperate, suicidal—anything. I do
not think that you could ever love.”
“Do you think that? I know better. I could love—but not like—not
like—”
“Not like me?”
“Yes, since you have said it. Something—something—would hold
me back from what you speak of so openly.”
“I always said you were as nearly without feeling as the rest of
the people here. Elizabeth Pembroke is the only woman I know of,
among all of us, that ever really loved. But see how curious it was
with her. She defied her father’s curses—yet she did not have the
nerve to marry the man she truly loved, because he happened to be
an officer in the Union army, for fear the Peytons and the Coles, and
the Lesters, and the rest of them, would have turned their backs on
her at church. Bah!”
“I don’t think it was want of nerve on Elizabeth Pembroke’s part,”
replied Olivia. “She was not born to be happy.”
“Nor was I,” cried Madame Koller, despondently.
There was no more said for a minute or two. Then Madame
Koller spoke again.
“Now you know what I feel. I don’t ask anything for myself—I only
wish to show you that you will ruin Pembroke if you marry him.”
An angry light came into Olivia’s eyes. She stood up, straight and
stern, and absolutely grew taller as she looked fixedly at Madame
Koller.
“This is intolerable,” she said. “There is nothing—absolutely
nothing—between Pembroke and me, and yet I am subjected to this
cross-questioning.”
“You would complain a great deal more of it if there were anything
between you,” answered Madame Koller, not without a glimpse of
grotesque humor. “But now you know where I stand—and let me tell
you, Olivia Berkeley, Pembroke is not guiltless toward me, however
he would pretend it”—and without waiting for the angry reply on
Olivia’s lips, she vanished through the open door.
All that evening, as Olivia sat with a book on her lap, not reading,
but watching the flame on the broad hearth, she was turning over in
her mind what Madame Koller had said. It had disturbed her very
much. It had not raised Pembroke at all in her esteem. She begun,
nevertheless, to think with pity over the wretchedness of his fate
should he be condemned to poverty. She fancied him harassed by
debts, by Miles’ helplessness. Her tender heart filled with pity.
“Olivia, my love,” said the Colonel, emerging from behind his
newspaper for a moment. “Pembroke means to try for the
nomination to Congress—and Cave tells me he is pretty sure to get
it. Great pity. A man who goes into public life without out a
competence dooms himself to a dog’s life for the remainder of his
days. It ruined Pembroke’s father thirty years ago.”
Olivia started. This was like an oracle answering her own
thoughts.
She thought, with a little bitter smile that it did not require much
generosity to give up a man on whom one had no claim, and
laughed at the idea of a struggle. At all events she would forget it all.
It was not so easy to forget though. The thought stayed with her, and
went to bed with her, and rose with her next morning.
Meanwhile, alas, for Madame Koller. When she came out, she
looked around in vain for the negro woman who had come with her.
She was not to be seen. They had come by the path that led through
the fields, which made it only a mile from The Beeches to Isleham,
but in going back, she missed her way—and then being a little afraid
of the negroes, she went “around the road,” as they called it. At the
first gate, a man galloped out of the darkness. It was Pembroke. He
recognized her at once, and got off his horse.
“You here,” he cried in surprise—“at this hour”—for it was well on
to seven o’clock, and Madame Koller was not noted for her fondness
for walking.
“Yes,” she answered.
“Is anything the matter at Isleham?” he asked—for she could not
have come from anywhere else.
“Nothing at all,” she replied nervously. “I—I—went over to see
Olivia Berkeley,” she added boldly.
Pembroke could say nothing. After a pause, Madame Koller burst
out.
“Pembroke, that girl is made of iron. She cares nothing for you—
for anybody but herself.”
“And did you find out any of those things by asking her?” he
inquired.
The twilight was so upon them that Madame Koller could not well
see Pembroke’s face, but she realized the tone of suppressed rage
in his voice. She herself had a temper that was stormy, and it flamed
out at that tone.
“Yes, I asked her. Are you a man that you can reproach me with
it?”
It is difficult for a man, if he is a gentleman, to express his wrath
toward a woman. Pembroke was infuriated at the idea that Madame
Koller should go to Olivia Berkeley and ask prying questions. He
ground his teeth with wrath as he looked at Madame Koller standing
before him, in the half light.
“What a price I have had to pay for folly,” he cried furiously. “A
little damned love-making in a garden—” he was so savage that he
was not choice of words and fell into profanity as men naturally do
—“a half dozen notes and bouquets—Great God! Is there anything in
that which should be a curse to a man’s whole life! And I love Olivia
Berkeley. I could make her love me, but—but for you.”
His violence sobered Madame Koller at once.
“There was not much, certainly,” she responded calmly. “The
love-making in the garden and the bouquets would have been little
enough—but unfortunately hearts are so perverse. A great many are
broken by such trifles. It was very amusing to you but not so
amusing altogether to me.”
Pembroke began to be ashamed of himself. But he was still
magnanimous enough not to tell her that she had taken a queer
course about those things.
“I suppose I am to blame,” he said with sulky rage after a
moment. “I’m willing to shoulder all the blame there is—but why
should Olivia Berkeley be insulted and annoyed by this kind of thing?
Do you think you will ever accomplish anything by—” he stopped and
blushed both for himself and her.
“One thing is certain,” he continued. “After what you have said to
Olivia Berkeley, questioning her about me, as you have admitted, I
shall simply carry out my intention of asking her to marry me. She
shall at least know the truth from me. But I think my chances are
desperate. Pshaw! I have no chance at all. It’s rather grotesque,
don’t you think, for a man to ask a woman to marry him when he
knows that she will throw him over and despise him from the bottom
of her heart?”
“That I must decline to discuss with you,” quietly answered
Madam Koller. She was indeed quiet, for at last—and in an instant,
she realized that she must forever give up Pembroke. All that long
journey was for nothing—all those months of wretched loneliness, of
still more wretched hopes and fears, were in vain. She heard
Pembroke saying:
“You had best let me see you home. It is too late for you to be out
alone.”
“You will not,” she replied. “I will not permit you, after what you
have said, to go one step with me.”
Pembroke felt thoroughly ashamed. It was one of the incidents of
his association with Madame Koller and Ahlberg that they always
made him say and do things he was ashamed of. In short, they
demoralized him. He had been betrayed by temper and by
circumstances into things that were utterly against his self-respect—
like this ebullition of rage against a woman. In the plenitude of his
remorse he was humble to the last degree.
“May I,” he asked—“may I, at least accompany you to your own
grounds? It is really not safe for you.”
Madame Koller turned upon him and stamped her foot.
“No, no—always no. Do you think there is any danger on earth
from which I would accept your protection? Go to Olivia Berkeley.
She would marry you in your poverty if it suited her whim, and be a
millstone around your neck. Go to her, I say.”
Pembroke watched her figure disappearing in the dusk along the
faint white line of the road. He stood still with his horse’s bridle in his
hand, turning over bitter things in his mind. He thought he would not
go to Isleham that night. He was depressed and conscience-stricken,
and in no lover-like mood. He mounted his horse and rode slowly
back to Malvern.
CHAPTER XII.
When two weeks had passed, Pembroke still had not gone to
Isleham—but in that time much had happened. The congressional
convention had been held, and the ball had been opened for him by
Cave with great brilliancy and power—and after a hard fight of two
days, Pembroke had got the nomination for Congress. It was of
infinite satisfaction to him in many ways. First because of the honor,
which he honestly coveted—and again because of the ready money
his election would bring. Modest as a congressional salary would be,
it was at least in cash—and that was what he most needed then. He
did not have a walk over. The parties were about evenly divided, and
it was known that the canvass would be close and exciting.
Pembroke warmed to his work when he knew this. It was like Bob
Henry’s trial—it took hold of his intellectual nature. He was called
magnetic—and he had a nerve power, a certain originality about him
that captivated his audiences.
There is nothing that a mixed crowd of whites and blacks at the
South so much hates as a demagogue. Especially is this the case
with the “poor whites” and the negroes. It was from them that
Pembroke knew he must get the votes to elect. When he appeared
on the hustings, he was the same easy, gentlemanly fellow as in a
drawing-room. He slapped no man on the back, nor offered treats,
nor was there any change in his manner. He was naturally affable,
and he made it his object to win the good will of his hearers through
their enlightenment, not their prejudices. The Bob Henry episode did
him immense service. A great revolution had taken place in regard to
Bob Henry. As, when he had been poor and in prison and friendless
and suspected, everybody had been down on him, so now when he
was free and cleared of suspicion, and had been an object of public
attention, he became something of a hero. He worked like a beaver
among his own people for “Marse French.” At “night meetings” and
such, he was powerful—and in the pulpits of the colored people, the
fiat went forth that it “warn’t wuff while fer cullud folks to pay de
capilation tax fer to git young Mr. Hibbs, who warn’ no quality nohow”
into Congress—for the redoubtable Hibbs was Pembroke’s
opponent. This too, had its favorable action on his canvass. As for
Petrarch, he claimed a direct commission from the Lord to send
“Marse French ter Congriss. De Lord, de Great Physicianer, done
spoken it ter me in de middle o’ de night like he did ter little Samson,
sayin’ ‘Petrarch whar is you?’ He say ‘What fur I gin you good
thinkin’ facticals, ’cep’ fur ter do my will? An’ it ain’t Gord’s will dat no
red headed Hibbs be ’lected over ole Marse French Pembroke’s son,
dat allus treated me wid de greatest circumlocution.” Petrarch’s
oratory was not without its effect.
Pembroke’s natural gift of oratory had been revealed to him at
the time of Bob Henry’s acquittal. He cultivated it earnestly, avoiding
hyperbole and exaggeration. There is nothing a Virginian loves so
well as a good talker. Within ten days of the opening of the
campaign, Pembroke knew that he was going to win. Hibbs had a
very bad war record. Pembroke had a very good one. The canvass
therefore to him, was pleasant, exciting, and with but little risk.
But Olivia Berkeley’s place had not been usurped. He had not
meant or desired to fall in love. As he had said truly to Cave, there
were other things for him than marriage. But love had stolen a march
upon him. When he found it out, he accepted the result with great
good humor—and he had enough masculine self-love to have good
hopes of winning her until—until Madame Koller had put her oar in.
But even then, his case did not seem hopeless, after the first burst of
rage and chagrin.
She would not surrender at once—that he felt sure, and he rather
liked the prospect of a siege, thinking to conquer her proud spirit by
a bold stroke at last. But Madame Koller had changed all this. He
was determined to make Olivia Berkeley know how things stood
between Madame Koller and himself—and the best way to do it was
to tell her where his heart was really bestowed.
It was in the latter part of April before a day came that he could
really call his own. He walked over from Malvern late in the
afternoon, and found Olivia, as he thought he should, in the garden.
The walks were trimmed up, and the flower-beds planted. Olivia, in a
straw hat and wearing a great gardening apron full of pockets,
gravely removed her gloves, her apron, and rolled them up before
offering to shake hands with Pembroke.
“Allow me to congratulate our standard-bearer, and to apologize
for my rustic occupations while receiving so distinguished a visitor.”
Pembroke looked rather solemn. He was not in a trifling mood
that afternoon, and he thought Olivia deficient in perception not to
see at once that he had come on a lover’s errand.
Is there anything more charming than an old-fashioned garden in
the spring? The lilac bushes were hanging with purple blossoms,
and great syringa trees were brave in their white glory. The guelder
roses nodded on their tall stems, and a few late violets scented the
air. It was a very quiet garden, and the shrubbery cut it off like a
hermitage. Pembroke had selected his ground well.
Olivia soon saw that something was on his mind, but she did not
suspect what it was. She had heard that Madame Koller was to
leave the country, and she thought perhaps Pembroke needed
consolation. Men often go to one woman to be consoled for the
perfidy of another. Presently as they strolled along, she stooped
down, and plucked some violets.
“I thought they were quite gone,” she said. “Here are four,” and as
she held them out to Pembroke, he took her little hand, inclosing the
violets in his own strong grasp.
There was the time, the place, the opportunity, and Olivia was
more than half won. Yet, half an hour afterward, Pembroke came out
of the garden, looking black as a thunder-cloud, and strode away
down by the path through the fields—a rejected suitor. Olivia
remained in the garden. The cool spring night came on apace. She
could not have described her own emotions to have saved her life—
or what exactly led up to that angry parting—for it will have been
seen before this that Pembroke was subject to sudden gusts of
temper. She had tried to put before him what she felt herself obliged
in honor to say—that the Colonel’s modest fortune was very much
exaggerated—and she had blundered wretchedly in so doing.
Pembroke had rashly assumed that she meant his poverty stood in
the way. Then he had as wretchedly blundered about Madame
Koller, and a few cutting words on both sides had made it impossible
for either to say more. Olivia, pale and red by turns, looked
inexpressibly haughty when Madame Koller’s name was mentioned.
Lovers’ quarrels are proverbially of easy arrangement—but the case
is different when the woman is high strung and the man high
tempered. Olivia received Pembroke’s confession with such cool
questionings that his self-love was cruelly wounded. Pembroke took
his dismissal so debonairly that Olivia was irresistibly impelled to
make it stronger. The love scene, which really began very prettily,
absolutely degenerated into a quarrel. Pembroke openly accused
Olivia of being mercenary. Olivia retaliated by an exasperating
remark, implying that perhaps Madame Koller’s fortune was not
without its charm for him—to which Pembroke, being entirely
innocent, responded with a rude violence that made Olivia more
furiously angry than she ever expected to be in her life. Pembroke
seeing this in her pale face and blazing eyes, stalked down the
garden path, wroth with her and wroth with the whole world.
He, walking fast back through the woods, was filled with rage and
remorse—chiefly with rage. She was a cold-blooded creature—how
she did weigh that money question—but—ah, she had a spirit of her
own—such a spirit as a man might well feel proud to conquer—and
the touch of her warm, soft hand!
Olivia felt that gap, that chasm in existence, when a shadowy
array of vague hopes and fears suddenly falls to the ground.
Pembroke had been certainly too confident and much too
overbearing—but—it was over. When this thought struck her, she
was walking slowly down the broad box-bordered walk to the gate.
The young April moon was just appearing in the evening sky. She
stopped suddenly and stood still. The force of her own words to him
smote her. He would certainly never come back. She turned and flew
swiftly back to the upper part of the garden, and stood in the very
spot by the lilac hedge, and went over it all in her mind. Yes. It was
then over for good—and he probably would not marry for a long,
long time. She remembered having heard Cave and her father speak
of Pembroke’s half joking aversion to matrimony. It would be much
better for him if he did not, as he had made up his mind to enter for a
career. But strange to say this did not warm her heart, which felt as
heavy as a stone.
Presently she went into the house, and was quite affectionate
and gay with her father, playing the piano and reading to him.
“Fathers are the pleasantest relations in the world,” she said, as
she kissed him good-night, earlier in the evening than usual. “No
fallings out—no misunderstandings—perfect constancy. Papa, I
wouldn’t give you up for any man in the world.”
“Wouldn’t you, my dear?” remarked that amiable old cynic
incredulously.
CHAPTER XIII.
One of the drawbacks of Arcadia is that everybody knows
everybody else’s business—and the possibility of this added to
Pembroke’s extreme mortification. He thought with dread of the
Colonel’s elaborate pretense of knowing nothing whatever about the
affair, Mrs. Peyton’s sly rallying, Mr. Cole’s sentimental condolence—
it was all very exasperating. But solely to Olivia’s tact and good
sense both escaped this. Not one soul was the wiser. Olivia,
however she felt, and however skillfully she might avoid meeting
Pembroke alone, was apparently so easy, so natural and self-
possessed, that it put Pembroke on his mettle. Together they
managed to hoodwink the whole county about their private affairs—
even Colonel Berkeley, who, if he suspected anything, was afraid to
let on, and Miles, whose devotion to Olivia became stronger every
day.
Luckily for Pembroke, he could plunge into the heat of his
canvass. After he had lost Olivia, the conviction of her value came to
him with overpowering force. There was no girl like her. She did not
protest and talk about her emotions and analyze them as some
women did—Madame Koller, for example—but Pembroke knew
there was “more to her,” as Cave said, “than a dozen Eliza Peytons.”
Perhaps Cave suspected something, but Pembroke knew he had
nothing to fear from his friend’s manly reticence. But to have lost
Olivia Berkeley! Pembroke sometimes wondered at himself—at the
way in which this loss grew upon him, instead of diminishing with
time, as the case usually is with disappointments. Yet all this time he
was riding from place to place, speaking, corresponding, as eager to
win his election as if he were the happiest of accepted lovers—more
so, in fact.
And then, there was that Ahlberg affair to trouble him. Like all the
men of his race and generation, he firmly believed there were some
cases in which blood must be shed—but a roadside quarrel, in which
nothing but personal dislike figured, did not come under that head.
Pembroke was fully alive to the folly and wickedness of fighting
Ahlberg under the circumstances—but it was now impossible for him
to recede. He could only hope and pray that something would turn
up to prevent a meeting so indefinitely fixed. But if Ahlberg’s going
away were the only thing to count upon, that seemed far enough out
of the question, for he stayed on and on at the village tavern, playing
cards with young Hibbs and one or two frequenters of the place,
riding over to play Madame Koller’s accompaniments, fishing for
invitations to dine at Isleham—in short, doing everything that a man
of his nature and education could do to kill time. Pembroke could not
but think that Ahlberg’s persistence could only mean that he was
really and truly waiting for his revenge. So there were a good many
things to trouble the “white man’s candidate,” who was to make such
a thorough and brilliant canvass, and whose readiness, cheerfulness
and indomitable spirit was everywhere remarked upon.
One night, as Pembroke was riding home after a hard day’s work
in the upper part of the county, and was just entering the long
straggling village street, his horse began to limp painfully. Pembroke
dismounted, and found his trusty sorrel had cast a shoe,—a nail had
entered his foot, and there was a job for the blacksmith. He led the
horse to the blacksmith’s shop, which was still open, although it was
past seven o’clock, and on the promise of having the damage
repaired in half an hour, walked over to the village tavern.
It was in September, and the air was chilly. The landlord ushered
him into what was called the “card room”—the only place there was
a fire. A cheery blaze leaped up the wide old-fashioned chimney, and
by the light of kerosene lamps, Pembroke saw a card party at a
round table in the corner. It was Ahlberg, young Hibbs, his political
opponent, and two or three other idle young men of the county.
According to the provincial etiquette, Pembroke was invited to
join the game, which he courteously declined on the ground that he
was much fatigued and was only waiting for the blacksmith to put his
horse’s shoe on before starting for home. The game then proceeded.
Pembroke felt awkward and ill at ease. He knew he was in the
way, as the loud laughter from Hibbs and his friends, and Ahlberg’s
subdued chuckle had ceased when he came in. They played
seriously—it was écarté, a game that Ahlberg had just taught his
postulants. Young Hibbs had a huge roll of bills on the table before
him, which he somewhat ostentatiously displayed in the presence of
his opponent, whose lack of bills was notorious. Also, Pembroke felt
that his presence induced young Hibbs to bet more recklessly than
ever, as a kind of bravado—and Ahlberg always won, when the
stake was worth any thing.
The waiting seemed interminable to Pembroke seated in front of
the fire. The conversation related solely to the game. Presently
Pembroke started slightly. Ahlberg was giving them some general
views on the subject of écarté. Pembroke himself was a good player,
and he had never heard this scheme of playing advocated.
Over the mantel was an old-fashioned mirror, tilted forward.
Although his back was to the players, Pembroke could see every
motion reflected in the glass. He saw Hibbs lose three times running
in fifteen minutes.
Pembroke’s sight was keen. He fixed it on the glass and a
curious look came into his dark face. Once he made a slight
movement as if to rise, but sat still. A second time he half rose and
sat down again—nobody in the room had seen the motion. Then,
without the slightest warning, he suddenly took three strides over to
the card table and, reaching over, seized Ahlberg by the collar, and
lifted him bodily up from the table into a standing position.
“Produce that king of spades,” he said.
If he had shot Ahlberg no greater surprise could have been
created. Hibbs jumped up, dashing the cards and money in a heap
on the floor, and nearly upsetting the table. One of his companions
grabbed the lamp to save it.
Ahlberg turned a deathly color, and made some inarticulate effort
to be heard, and tried to wrest himself from Pembroke’s grasp. But it
was in vain. Pembroke shook him slightly, but never relaxed his hold.
“The king of spades, I say.”
Without a word Ahlberg reached down, and from some unknown
depths produced the card. He was no coward, but he was
overmastered physically and mentally. He knew in an instant that
Pembroke had seen it all, and there was no shadow of escape for
him.
Pembroke let go of Ahlberg’s collar, and, taking out a white
handkerchief, wiped his hands carefully. Ahlberg had sunk back,
panting, in a chair. The grip of a hand like Pembroke’s in the
neighborhood of the wind-pipe is calculated to shorten the breath.
Hibbs looked dazed, from one to the other, and then to the floor,
where the cards had fallen. The one damning card lay on the table.
“I saw it twice before this, in the glass,” said Pembroke to Hibbs.
“Each time I tried to catch him, but he did it so well I couldn’t. But the
last time it was perfectly plain,—you see. I could see under the table
in the glass. You had better pick up your money, Hibbs.”
At this, Ahlberg spoke up.
“All of it is Monsieur Hibbs’,” he said with elaborate politeness,
recovering his breath a little, “except two fifty-dollar notes, which are
mine.”
Pembroke picked out the two fifty-dollar notes and dashed them
in Ahlberg’s face, who very cleverly caught them and put them in his
pocket.
“Mr. Pembroke,” said Hibbs, stammering and blushing, “I—I—
hope you won’t say anything about this, sir. It would ruin me—I don’t
mean in the canvass, for I tell you truly, sir, I hope you’ll be elected,
and if it wasn’t for the party, I’d give up the fight now. But my mother,
sir, don’t approve—don’t approve of playing for money—and—”
“You are perfectly safe,” answered Pembroke, “and quite right in
your idea of duty to your party, and your dislike to wound your
mother is creditable. But as for this dog, he must leave this county at
once.”
Ahlberg said not a word. He did not lack mere physical courage,
but cheating at cards was, to him, the most heinous offense of which
he could be convicted. He had been caught—it was the fortune of
war—there was nothing to be said or done. At least, it happened in
this out-of-the-way corner of the world, where it could never be
known to anybody—for he did not count his acquaintances in the
country as anybody, unless—perhaps—Madame Koller. At that he
grew pale for the first time. He really wanted Madame Koller’s
money. But, in fact, he was somewhat dazed by Pembroke’s way of
settling the trouble. It really shocked his ethics to see one gentleman
punish another as if he were a bargeman or a coal heaver. These
extraordinary Anglo-Saxons! But one thing was plain with him—if he
did not remain perfectly quiescent Pembroke was quite capable of
throwing him bodily out of the window—and if he had lost his honor,
as he called it, there was no reason why he shouldn’t save his
bones.
Pembroke, however, although he would have sworn that nothing
Ahlberg could do in the way of rascality could surprise him, was as
yet amazed, astounded, and almost puzzled by the promptness with
which Ahlberg acquiesced in the status which Pembroke
established. Ahlberg made no protest of innocence—he did not
bluster, or grow desperate, or break down hysterically, as even a
very bad man might under the circumstances. He simply saw that if
he said anything, he might feel the weight of Pembroke’s arm.
Nothing that he could have said or done was as convincing of his
thorough moral obtuseness as the way in which he accepted his own
exposure.
Just then the landlord opened the door. “Mr. Pembroke, your
horse is at the door. It’s going to be a mighty bad night though—
there’s a cloud coming up. You’d better stay and join them
gentlemen in their game.”
“No, I thank you,” replied Pembroke, and turning to Ahlberg. “Of
course, after what has passed, it is out of the question that I should
fight you. Good God! I’d just as soon think of fighting a jail bird! Don’t
take too long to get out of this county. Good night, Mr. Hibbs—good
night—good night.”
Hibbs accompanied him out, and stood by him while he mounted.
“Mr. Pembroke,” he said, holding his hat in his hand, “I’m very
much obliged for what you have done for me, and what you have
promised. I promise you I’ll never touch a card for money again as
long as I live.”
“And don’t touch a card at all with such an infernal rascal as
Ahlberg,” answered Pembroke, altogether forgetting sundry
agreeable games he had enjoyed with Ahlberg in Paris, and even in
that very county—but it had been a good while ago, and Ahlberg had
not tried any tricks on him.
This relieved Pembroke of a load of care—the folly of that quarrel
was luckily escaped. But he debated seriously with himself whether
he ought not to tell Madame Koller of Ahlberg’s behavior, that she
might be on her guard against him. In a day or two he heard, what
did not surprise him, that Ahlberg was about to leave the country—
but at the same time that Madame Koller and her mother were to
leave The Beeches rather suddenly. Mrs. Peyton met him in the
road, and stopped her carriage to tell him about Eliza Peyton’s
consummate folly in allowing that Ahlberg to stick to her like a burr—
they actually intended crossing in the same steamer. That
determined Pembroke. He rode over to The Beeches, and sitting
face to face with Madame Koller in her drawing-room, told her the
whole story. Pembroke was somewhat shocked to observe how little
she seemed shocked at Ahlberg’s conduct. It was certainly very bad,
but—but—she had known him for so long. Pembroke was amazed
and disgusted. As he was going, after a brief and very business-like
visit, Madame Koller remarked, “And it is so strange about Louis.
The very day after it happened, he was notified of his appointment
as First Secretary in the Russian diplomatic service—or rather his re-
appointment, for he was in it ten years—and he has come into an
excellent property—quite a fortune in fact for a first secretary.”
Pembroke rode back home slowly and thoughtfully. He had never
before realized how totally wanting Madame Koller was in integrity of
mind. Olivia Berkeley now—
CHAPTER XIV.
It takes a long time for a country neighborhood to recover from a
sensation. Three or four years after Madame Koller, or Eliza Peyton
had disappeared along with her mother and Ahlberg, people were
still discussing her wonderful ways. Mr. Cole was paying his court
mildly to Olivia Berkeley, but in his heart of hearts he had not
forgotten his blonde enslaver. The Colonel was the same Colonel—
his shirt-ruffle rushed out of his bosom as impetuously as of old. He
continued to hate the Hibbses. Dashaway had been turned out to
grass, but another screw continued to carry the Colonel’s colors to
defeat on the county race track. Olivia, too, had grown older, and a
great deal prettier. A chisel called the emotions, is always at work
upon the human countenance—a face naturally humane and
expressive grows more so, year by year.
It is not to be expected that she was very happy in that time. Life
in the country, varied by short visits to watering places in the summer
and occasionally to cities in the winter, is dull at best for a girl grown
up in the whirl of civilization. There came a time—after Pembroke,
taking Miles with him had gone to Washington, when life began to
look very black to Olivia Berkeley’s eyes. She suffered for want of an
object in life. She loved her father very much, but that cheerful,
healthful and robustious old person hardly supplied the craving to
love and tend which is innate in every woman’s heart. It is at this
point in their development that women of inferior nature begin to
deteriorate. Not so with Olivia Berkeley. Life puzzled and displeased
her. She found herself full of energy, with many gifts and
accomplishments, condemned in the flower of her youth to the dull
routine of a provincial life in the country. She could not understand it
—neither could she sit down in hopeless resignation and accept it.
She bestirred herself. Books there were in plenty at Isleham—the
piano was an inestimable comforter. She weathered the storm of
ennui in this manner, and came to possess a certain content—to
control the outward signs of inward restlessness. Meanwhile she
read and studied feverishly, foolishly imagining that knowing a great
number of facts would make her happy. Of course it did not—but it
made her less unhappy.
As for Pembroke, the fate which had fallen hard on Olivia
Berkeley had fondly favored him. He was not only elected to
Congress, but he became something of a man after he got there.
The House of Representatives is a peculiar body—peculiarly
unfavorable to age, and peculiarly favorable to youth. Pembroke, still
smarting under his mortification, concluded to dismiss thoughts of
any woman from his mind for the present, and devote himself to the
work before him. With that view, he scanned closely his environment
when he went to Washington. He saw that as a young member he
was not expected to say anything. This left him more leisure to study
his duties. He aspired to be a lawyer—always a lawyer. He found
himself appointed to a committee—and his fellow members on it very
soon found that the quiet young man from Virginia was liable to be
well informed on the legal questions which the House and the
committees are constantly wrangling over. Every man on that
committee became convinced that the quiet young man would some
day make his mark. This was enough to give him a good footing in
the House. His colleagues saw that election after election, the young
man was returned, apparently without effort on his part, for
Pembroke was not a demagogue, and nothing on earth would have
induced him to go into a rough and tumble election campaign. At last
it got so that on the few occasions when he rose in his place, he had
no trouble in catching the Speaker’s eye. He was wise enough not to
be betrayed by his gift of oratory into speech-making—a thing the
House will not tolerate from a young member. He had naturally a
beautiful and penetrating voice and much grace and dignity in
speaking. These were enough without risking making himself
ridiculous by a premature display as an orator. He sometimes thrilled
when the great battles were being fought before his eyes—it was in
the reconstruction time—and longed for the day which he felt would
come when he might go down among the captains and the shouting,
but he had the genius of waiting. Then he was a pleasant man at
dinner—and his four years army service had given him a soldierly
frankness and directness. He lived with Miles in a simple and quiet
way in Washington. He did not go out much, as indeed he had no
time. He became quite cynical to himself about women. The pretty
girls from New York were quite captivated with the young man from
Virginia. They wanted to know all about his lovely old place,
especially one charming bud, Miss de Peyster.
“Come and see it,” Pembroke would answer good-naturedly. “Half
the house was burned up by our friends, the enemy—the other half
is habitable.”
“And haven’t you miles and miles of fields and forests, like an
English nobleman?” the gay creature asked.
“Oh yes. Miles and miles. The taxes eat up the crops, and the
crops eat up the land.”
“How nice,” cried the daughter of the Knickerbockers. “How much
more romantic it is to have a broken down old family mansion and
thousands of acres of land, than to be a stockbroker or a real estate
man—and then to have gone through the whole war—and to have
been promoted on the field—”
Pembroke smiled rather dolefully. His ruined home, his
mortgaged acres, Miles’ life-long trouble, his four years of marching
and starving and fighting, did not appear like romantic incidents in
life, but as cruel blows of fate to him.
But Helena de Peyster was a pleasant girl, and her mother was
gentle, amiable, and well-bred. They had one of the gayest and most
charming houses in Washington, and entertained half the diplomatic
corps at dinner during every week. They would gladly have had
Pembroke oftener. He came in to quiet dinners with them, assumed
a fatherly air with Helena, and liked them cordially. They were good
to Miles too, who sometimes went to them timidly on rainy
afternoons when he would not be likely to find anybody else.
So went the world with Pembroke for some years until one
evening, going to his modest lodgings, he found a letter with Colonel
Berkeley’s big red seal on it awaiting him.

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