Question 1

Exemptions and deductions are used

Accepted Answer

A) to add to taxes that must be paid. 
B) by taxpayers to reduce the amount of income subject to tax. 
C) to determine the type of tax structure. 
D) to determine what items are subject to sales taxes. 
A) to add to taxes that must be paid. 
B) by taxpayers to reduce the amount of income subject to tax. 
C) to determine the type of tax structure. 
D) to determine what items are subject to sales taxes.

Question 2

If,as your taxable income decreases,you pay a larger percentage of your taxable income in taxes,then the tax is

Accepted Answer

A) regressive. 
B) proportional. 
C) progressive. 
D) unfair. 
A) regressive. 
B) proportional. 
C) progressive. 
D) unfair.

Question 3

The horizontal-equity principle of taxation is not easy to use in practice because

Accepted Answer

A) some people engage in rent seeking to reduce their taxes below the level other people pay. 
B) people can use tax loopholes to reduce their incomes below the incomes of other taxpayers. 
C) different people receive different levels of government benefits even if their incomes are the same. 
D) it is difficult to determine whether people are in the same economic situation. 
A) some people engage in rent seeking to reduce their taxes below the level other people pay. 
B) people can use tax loopholes to reduce their incomes below the incomes of other taxpayers. 
C) different people receive different levels of government benefits even if their incomes are the same. 
D) it is difficult to determine whether people are in the same economic situation.

Question 4

Which of the following summarises the information provided by a Lorenz curve?

Accepted Answer

A) the Lorenz coefficient 
B) the income distribution ratio 
C) the Gini coefficient 
D) the slope (the rise divided by the run)of the Lorenz curve at a particular point on the curve 
A) the Lorenz coefficient 
B) the income distribution ratio 
C) the Gini coefficient 
D) the slope (the rise divided by the run)of the Lorenz curve at a particular point on the curve

Question 5

Rapid economic growth tends to increase the degree of income mobility.

Accepted Answer

A) True 
 B)False

Question 6

If you pay a constant percentage of your taxable income in taxes,the tax is

Accepted Answer

A) regressive. 
B) proportional. 
C) progressive. 
D) random. 
A) regressive. 
B) proportional. 
C) progressive. 
D) random.

Question 7

If,as your taxable income decreases,you pay a smaller percentage of your taxable income in taxes,then the tax is

Accepted Answer

A) regressive. 
B) proportional. 
C) progressive. 
D) unfair. 
A) regressive. 
B) proportional. 
C) progressive. 
D) unfair.

Question 8

All of the following occur whenever a government taxes a product except

Accepted Answer

A) the quantity consumed of that product falls. 
B) the price of that product rises. 
C) the marginal benefit of the last unit sold exceeds the marginal cost of producing it. 
D) there will be no excess burden if the government's tax revenue is sufficiently large to offset the deadweight loss. 
A) the quantity consumed of that product falls. 
B) the price of that product rises. 
C) the marginal benefit of the last unit sold exceeds the marginal cost of producing it. 
D) there will be no excess burden if the government's tax revenue is sufficiently large to offset the deadweight loss.

Question 9

Figure 16-2   Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other.
-Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Accepted Answer

A) is Pa - Pc under either supply curve. 
B) is Pb - Pc under either supply curve. 
C) is Pa - Pc if the supply curve is S0 and Pb - Pc if the supply curve is S1. 
D) is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1. 
A) is Pa - Pc under either supply curve. 
B) is Pb - Pc under either supply curve. 
C) is Pa - Pc if the supply curve is S0 and Pb - Pc if the supply curve is S1. 
D) is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1.

Question 10

As the value of the Gini coefficient approaches one,

Accepted Answer

A) income distribution becomes less unequal. 
B) income distribution becomes more unequal. 
C) the percentage of the population under the poverty line increases. 
D) the percentage of the population under the poverty line decreases. 
A) income distribution becomes less unequal. 
B) income distribution becomes more unequal. 
C) the percentage of the population under the poverty line increases. 
D) the percentage of the population under the poverty line decreases.

Question 11

The Gini coefficient is measured by

Accepted Answer

A) summing up the cumulative income percentages on the Lorenz curve. 
B) summing up the total income earned by the population and dividing by the size of the population. 
C) using the formula: area between perfect inequality and Lorenz curve ÷ area between the line of perfect equality to the Lorenz curve. 
D) using the formula: area between the line of perfect equality and the Lorenz curve ÷ the area under the line of perfect equality. 
A) summing up the cumulative income percentages on the Lorenz curve. 
B) summing up the total income earned by the population and dividing by the size of the population. 
C) using the formula: area between perfect inequality and Lorenz curve ÷ area between the line of perfect equality to the Lorenz curve. 
D) using the formula: area between the line of perfect equality and the Lorenz curve ÷ the area under the line of perfect equality.

Question 12

Figure 16-1  
-Refer to Figure 16-1.Of the tax revenue collected by the government,the portion borne by producers is represented by the area

Accepted Answer

A) B + C. 
B) F + G. 
C) E + H. 
D) B + C + F + G. 
A) B + C. 
B) F + G. 
C) E + H. 
D) B + C + F + G.

Question 13

A tax bracket is

Accepted Answer

A) the per cent of taxable income paid in taxes at a specific income bracket. 
B) the income range within which a particular tax rate applies. 
C) the type of tax structure for which a range of taxes applies. 
D) the range,from the high to the low tax rate,of a particular type of tax. 
A) the per cent of taxable income paid in taxes at a specific income bracket. 
B) the income range within which a particular tax rate applies. 
C) the type of tax structure for which a range of taxes applies. 
D) the range,from the high to the low tax rate,of a particular type of tax.

Question 14

If the marginal tax rate is equal to the average tax rate as taxable income increases,the tax structure is

Accepted Answer

A) regressive. 
B) proportional. 
C) progressive. 
D) unfair. 
A) regressive. 
B) proportional. 
C) progressive. 
D) unfair.

Question 15

If you pay $3000 in taxes on an income of $28 000,and $4450 in taxes on an income of $38 000,what is your marginal tax rate? Show your work.

Accepted Answer

Marginal tax rate =

Question 16

Figure 16-2   Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other.
-Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Accepted Answer

A) is greater under the more elastic supply curve S0. 
B) is greater under the less elastic supply curve S0. 
C) is greater under the less elastic supply curve S1. 
D) is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour. 
A) is greater under the more elastic supply curve S0. 
B) is greater under the less elastic supply curve S0. 
C) is greater under the less elastic supply curve S1. 
D) is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour.

Question 17

Figure 16-2   Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other.
-Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,

Accepted Answer

A) the deadweight loss is identical under either supply curve. 
B) the deadweight loss is greater under the supply curve S1. 
C) the deadweight loss is greater under the supply curve S0. 
D) there is no deadweight loss since revenue raised is used to fund government projects. 
A) the deadweight loss is identical under either supply curve. 
B) the deadweight loss is greater under the supply curve S1. 
C) the deadweight loss is greater under the supply curve S0. 
D) there is no deadweight loss since revenue raised is used to fund government projects.

Question 18

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

Accepted Answer

A) the horizontal-equity principle 
B) the goal of economic efficiency 
C) the goal of attaining social objectives 
D) the ability-to-pay principle 
A) the horizontal-equity principle 
B) the goal of economic efficiency 
C) the goal of attaining social objectives 
D) the ability-to-pay principle

Question 19

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

Accepted Answer

Average tax rate = $

Question 20

Petrol taxes that are typically used for highway construction and maintenance are consistent with which of the following principles of taxation?

Accepted Answer

A) the ability-to-pay principle 
B) the horizontal-equity principle 
C) the vertical-equity principle 
D) the benefits-received principle 
A) the ability-to-pay principle 
B) the horizontal-equity principle 
C) the vertical-equity principle 
D) the benefits-received principle

Exemptions and deductions are used

If,as your taxable income decreases,you pay a larger percentage of your taxable income in taxes,then the tax is

The horizontal-equity principle of taxation is not easy to use in practice because

Which of the following summarises the information provided by a Lorenz curve?

Rapid economic growth tends to increase the degree of income mobility.

If you pay a constant percentage of your taxable income in taxes,the tax is

If,as your taxable income decreases,you pay a smaller percentage of your taxable income in taxes,then the tax is

All of the following occur whenever a government taxes a product except

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

As the value of the Gini coefficient approaches one,

The Gini coefficient is measured by

Figure 16-1 -Refer to Figure 16-1.Of the tax revenue collected by the government,the portion borne by producers is represented by the area

A tax bracket is

If the marginal tax rate is equal to the average tax rate as taxable income increases,the tax structure is

If you pay $3000 in taxes on an income of $28 000,and $4450 in taxes on an income of $38 000,what is your marginal tax rate? Show your work.

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,

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

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

Petrol taxes that are typically used for highway construction and maintenance are consistent with which of the following principles of taxation?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

Filters

Exam 16: The Distribution of Income and Social Policy

Exemptions and deductions are used

If,as your taxable income decreases,you pay a larger percentage of your taxable income in taxes,then the tax is

The horizontal-equity principle of taxation is not easy to use in practice because

Which of the following summarises the information provided by a Lorenz curve?

Rapid economic growth tends to increase the degree of income mobility.

If you pay a constant percentage of your taxable income in taxes,the tax is

If,as your taxable income decreases,you pay a smaller percentage of your taxable income in taxes,then the tax is

All of the following occur whenever a government taxes a product except

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

As the value of the Gini coefficient approaches one,

The Gini coefficient is measured by

Figure 16-1 -Refer to Figure 16-1.Of the tax revenue collected by the government,the portion borne by producers is represented by the area

A tax bracket is

If the marginal tax rate is equal to the average tax rate as taxable income increases,the tax structure is

If you pay $3000 in taxes on an income of $28 000,and $4450 in taxes on an income of $38 000,what is your marginal tax rate? Show your work.

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Figure 16-2 Figure 16-2 shows a demand curve and two sets of supply curves,one set more elastic than the other. -Refer to Figure 16-2.If the government imposes an excise tax of $1.00 on every unit sold,

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

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

Petrol taxes that are typically used for highway construction and maintenance are consistent with which of the following principles of taxation?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

Filters