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

Economists caution that conventional statistics used to estimate the extent of poverty in the United States fail to account for benefits people receive that,if considered,would reduce the amount of poverty.Which of the following is an example of these benefits?

An income tax system is ________ if marginal tax rates increase as income increases.

What is a Lorenz curve and what is a Gini coefficient?

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

U.S.taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns.This administrative cost

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

Rent seeking behavior,unlike profit maximizing behavior in competitive markets,wastes society's scarce resources.

Vertical-equity is most closely associated with which of the following goals or principles?

Former Alabama Governor George Wallace ran for president several times,once as a third-party candidate in 1968.Wallace claimed there was "not a dime's worth of difference" between the Democratic and Republican parties during one of his campaigns.How does Wallace's comment relate to the median voter theorem?

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?

Figure 18-1 -Refer to Figure 18-1.Area F+G represents

Table 18-2 -Refer to Table 18-2.The table above outlines the rankings of three members of the U.S.House of Representatives on three spending alternatives.Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom,Dick and Harriet,all members of the House of Representatives,participate in a series of votes in which they are to determine which of the spending alternatives should receive funding.Three votes will be taken: (1)Foreign Aid and Post-Secondary Education (2)Foreign Aid and Roads and Bridges and (3)Post-Secondary Education and Roads and Bridges. Determine whether the voting paradox will occur as a result of these votes.

All Gini coefficients must lie between 0 and 1.The lower the value,

Which of the following is the source of revenue for Medicare and Social Security in the United States?

The decision to make the U.S.income tax system progressive was

If your income is $92,000 and you pay taxes of $19,475,what is your average tax rate? Show your work.

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

A tax is efficient if

For many U.S.individuals and households,replacing the federal income tax with a consumption tax would not make a major change in their tax liability - the amount they would be taxed.Which of the individuals described would be least affected by replacing the income tax with a consumption tax?

A key insight of the public choice model is that public policymakers are likely to pursue the public's interest,even if their self-interests conflict with the public interest.