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

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?

What is rent seeking and how is it related to regulatory capture?

Figure 18-3 Figure 18-3 shows the Lorenz curve for a hypothetical country. -Refer to Figure 18-3.The second lowest 20 percent of households

When the demand for a product is less elastic than the supply,

Figure 18-2 -Refer to Figure 18-2.The figure above shows a demand curve and two supply curves,one more elastic than the other.Use Figure 18-2 to answer the following questions. a.Suppose the government imposes an excise tax of $1.00 on every unit sold.Use the graph to illustrate the impact of this tax. b.If the government imposes an excise tax of $1.00 on every unit sold,will the consumer pay more of the tax if the supply curve is S₁ or S₂? Refer to the graphs in your answer. c.If an excise tax of $1.00 on every unit sold is imposed,will the revenue collected by the government be greater if the supply curve is S₁ or S₂? d.If the government imposes an excise tax of $1.00 on every unit sold,will the deadweight loss be greater if the supply curve is S₁ or S₂?

Financial contributions to the campaigns of members of Congress,state legislators and other elected officials by firms that seek special interest legislation that make the firms better off are

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.Which of the following explanations for Flack's vote is most consistent with the public choice model?

The poverty rate is defined as the percentage of the

Table 18-1 -Refer to Table 18-1.The table above lists three policy alternatives that the U.S.Senate will vote on,along with the ranking of these alternates.The Senate must decide which of these alternatives should receive an additional $1 billion of funding,and there is enough money in the federal budget for only one of these alternatives.If a series of votes is taken in which each pair of alternatives is considered (homeland security and education; homeland security and medical research; education and medical research)which of the following will result from these votes?

In 2010,over 75 percent of the revenue of the U.S.federal government was raised through

A regressive tax is a tax for which people with lower incomes

Figure 18-3 Figure 18-3 shows the Lorenz curve for a hypothetical country. -Refer to Figure 18-3.The second highest 20 percent of households

The Center for Science in the Public Interest has stated that an 8-cent tax on a 12-ounce serving of a soda would raise ________ per year.

Which of the following statements best represents the opinion of many economists regarding the impact that changes in tax laws have had on recent changes in income inequality in the United States?

A study by the Congressional Budget Office (CBO)regarding the corporate income tax included the following statement: "A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax,but the money must come from somewhere..." The comments that followed this statement argued that

The complexity of the U.S.federal income tax system results in significant annual deadweight losses.The opportunity cost of the hours taxpayers spend on record keeping and completing their tax returns amounts to billions of dollars. a.If the tax system was simplified,how would this benefit the economy? b.Why hasn't the tax system been simplified?

Horizontal equity is achieved when taxes are collected from those who benefit from the government expenditure of the tax revenue.

According to the ability-to-pay principle of taxation,

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people,if grocery stores were required by law to charge a 10-cent fee for disposable bags,this fee could be considered a

Economist Kenneth Arrow has shown mathematically that no system of voting will consistently represent the underlying preferences of voters.This finding is called