Exam 15: Public Choice, Taxes, and the Distribution of Income

Table 15.1 Ivy Jasmine Rose Subsidies for education 2nd 3rd 1st Research on Alzheimer's 3rd 1st 2nd Subsidies for daycare 1 st 2nd 3rd Suppose $1 billion is available in the budget and Parliament is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Subsidies for daycare. Table 15.1 shows three voters' rankings of the alternatives. -Refer to Table 15.1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to education subsidies and increased subsidies for daycare,

Figure 15.5 Figure 15.5 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 15.5.If area X = 2,060, area Y = 240, and area Z= 2,700, calculate the Gini coefficient for Syldavia.

The public choice model asserts that the self-interest of policymakers is likely to cause them to take actions that are inconsistent with the preferences of voters, even where those preferences are clear.

Economists argue that the corporate income tax is an example of a tax with a high deadweight loss because

As the value of the Gini coefficient approaches zero,

A situation where a Member of Parliament votes to approve a bill in exchange for favorable votes from other members on other bills is called

If the Gini coefficient for Madeupistan is 1, it means that income distribution is perfectly equal in this society.

Define logrolling.Explain why logrolling often results in legislation that benefits the economic interests of a few, while harming the interests of a larger group of people.

An average tax rate is calculated as

Suppose $1 billion is available in the budget and Parliament is considering allocating the funds to one of the following three alternatives: a)subsidies for education b)research on Alzheimer's c)increased subsidies for daycare If voters prefer a to b and b to c, then if preferences are transitive,

Table 15.1 Ivy Jasmine Rose Subsidies for education 2nd 3rd 1st Research on Alzheimer's 3rd 1st 2nd Subsidies for daycare 1 st 2nd 3rd Suppose $1 billion is available in the budget and Parliament is considering allocating the funds to one of the following three alternatives: 1)Subsidies for education, 2)Research on Alzheimer's or 3)Subsidies for daycare. Table 15.1 shows three voters' rankings of the alternatives. -Refer to Table 15.1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.The first pair considered is between subsidies for education and research on Alzheimer's.The second pair considered is between Alzheimer's research and increased subsidies for daycare.The third pair considered is between education subsidies and increased subsidies for daycare.In this case, the collective preferences of the voters

The voting paradox suggests that the "voting market," as represented by elections,

When the elasticity of demand for a product is smaller than the elasticity of supply, sellers pay the majority of the tax on the product.

Users fees for ports and marinas are an example of the ________.

If you pay $3,000 in taxes on an income of $28,000, and $4,450 in taxes on an income of $38,000, what is your marginal tax rate? Show your work.

Consider the following methods of taxing a corporation's income: a)A flat tax, as opposed to a progressive tax, is levied on corporate profits. b)A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits.The shareholder would then be required to include this amount as taxable income for her personal income tax.The corporation does not pay a tax. c)A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains. Which of the methods above would avoid double taxation?

What is the difference between a marginal tax rate and an average tax rate? Which is more important in determining the impact of the tax system on economic behavior?

The largest percentage of federal income tax revenue in Canada is paid by the

Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate

One important difference between the political process and the market process is that