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

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

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

One result of the public choice model is that most economists believe that

"For a given supply curve, the excess burden of a tax will be greater when the demand for a product is less elastic than when the demand is more elastic." This statement is

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

Some economists who use the public choice model to explain the ways government intervenes in the economy believe that regulatory capture results when an agency or commission is given authority over a particular industry or product. Which of the following is the best example of regulatory capture?

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

A situation where a member of Congress votes to approve a bill in exchange for favorable votes from other members on other bills is called

According to projections for 2013 by the Tax Policy Center, the 20 percent of U.S. taxpayers who make the highest incomes

Figure 18-1 -Refer to Figure 18-1. Of the tax revenue collected by the government, the portion borne by producers is represented by the area

Why is a typical person likely to gather more information when buying a new car than when voting for a member of Congress?

Which of the following statements is true?

Table 18-3 -Refer to Table 18-3. The table above outlines the rankings of three members of the U.S. Senate on three spending alternatives. Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Bart, Lisa, and Maggie, all members of the Senate, 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) Immigration Reform and Unemployment Benefits (2) Immigration Reform and Social Security Reform and (3) Unemployment Benefits and Social Security Reform. Show the results of each vote and determine whether the voting paradox will occur as a result of these votes.

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

Many state governments use lotteries to raise revenue. If a lottery is viewed as a tax, is it most likely a progressive tax or a regressive tax? What information would you need to determine whether the burden of a lottery is progressive or regressive?

Which of the following groups had the highest poverty rate in 2011 in the United States?

Figure 18-1 -Refer to Figure 18-1. Area E + H represents

Table 18-6 Table 18-6 shows the income tax brackets and tax rates for single taxpayers in Calpernia. -Refer to Table 18-6. Calculate the income tax paid by Sasha, a single taxpayer with an income of $60,000.

The idea that individuals should be taxed in proportion to the marginal benefits that they receive from public goods is called

Table 18-10 Table 18-10 shows the income tax brackets and tax rates for single taxpayers in Bauxhall. -Refer to Table 18-10. A tax exemption is granted for the first $10,000 earned per year. Suppose you earn $75,000. a. What is the amount of taxes you will pay? b. What is your average tax rate? c. What is your marginal tax rate?