Exam 18: Public Choice, Taxes, and the Distribution of Income

Table 18-6 Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Calpernia. -Refer to Table 18-6.Sasha is a single taxpayer with an income of $60,000.What is his marginal tax rate and what is his average tax rate?

Last year, Anthony Millanti earned exactly $30,000 of taxable income.Assume that the income tax system used to determine Anthony's tax liability is progressive.The table below lists the tax brackets and the marginal tax rates that apply to each bracket. a.Draw a new table that lists the amounts of income tax that Anthony is obligated to pay for each tax bracket, and the total tax he owes the government.(Assume that there are no allowable tax deductions, tax credits, personal exemptions, or any other deductions that Anthony can use to reduce his tax liability). b.Determine Anthony's average tax rate.

Figure 18-7 Figure 18-7 shows the Lorenz curve for a hypothetical country. -Refer to Figure 18-7.The second lowest 20 percent of households

In the United States, taxpayers are allowed to exclude from taxation a certain amount of income, called

Economists often analyze the interaction of individuals and firms in markets.Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others, a process that is referred to as

When the demand for a product is less elastic than the supply, consumers pay the majority of the tax on the product.

At the state and local levels in the United States, the largest source of tax revenue is

If the marginal tax rate is less than the average tax rate as taxable income increases, the tax structure is

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 18-2.If the government imposes an excise tax of $1.00 on every unit sold, what is the size of the deadweight loss, if there is any?

Logrolling refers to attempts by individuals to use government action to make themselves better off at the expense of others.

If you pay $14,000 in taxes on an income of $125,000, and $17,400 in taxes on an income of $144,000, what is your marginal tax rate? Show your work.

Which of the following is an example of rent seeking behavior?

Many economists believe that when the federal government establishes an agency to regulate a particular industry, the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

Both presidents Kennedy and Reagan proposed significant cuts in income taxes because

A key assumption of the public choice model is that government policymakers will pursue their own self-interests.Economists assume that consumers and firms pursue their own self-interests when they interact in competitive markets and this interaction results in efficient economic outcomes.Does the pursuit of self-interest by policymakers result in efficient economic outcomes?

The political process is more likely to serve the interests of individuals whose preferences are in the middle, rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

The public choice model raises questions about the government's ability to regulate economic activity efficiently.Which of the following statements represents the views of most economists with regard to the role of government?

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.The public choice model suggests that Flack's vote is best explained by which of the following?

Figure 18-1 -Refer to Figure 18-1.The excess burden of the tax is represented by the area

The Arrow impossibility theorem states that