Exam 16: The Distribution of Income and Social Policy

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

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

Figure 16-7 Figure 16-7 shows the Lorenz curve for a hypothetical country. -Refer to Figure 16-7.The second lowest 20 per cent of households

In reference to the federal income tax system,a tax bracket is

What is the poverty rate?

The person or firm that pays a tax bears the burden of the tax.

According to the benefits-received principle,those who receive the benefits from a government program should pay the taxes that support the program.

Exempting food purchases from sales tax is consistent with the ability-to-pay principle,although not necessarily consistent with vertical equity.

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

If your income is $40 000 and you pay taxes of $4650,what is your average tax rate? Show your work.

As the value of the Gini coefficient approaches zero,

Describe the main factors economists believe cause inequality of income.

Figure 16-5 Figure 16-5 shows the Lorenz curve for a hypothetical country. -Refer to Figure 16-5.The middle 20 per cent of households

If you pay $2000 in taxes on an income of $20 000,and a tax of $2700 on an income of $30 000,then over this range of income the tax is

The federal corporate income tax is

Suppose the government imposes an 8 per cent sales tax on clothing items and the tax is levied on sellers.Who pays for the tax in this situation? (Assume that the demand curve is downward sloping and that the supply curve is upward sloping. )

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.

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

When considering changes in tax policy,economists usually focus on

Figure 16-6 Figure 16-6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 16-6.If area X = 2060,area Y = 240,and area Z= 2700,calculate the Gini coefficient for Syldavia.