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

Figure 18-6 Figure 18-6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 18-6.If area X = 2,060,area Y = 240,and area Z= 2,700,calculate the Gini coefficient for Syldavia.

For a given supply curve,the deadweight loss from the imposition of a tax is smaller if demand is more elastic.

The Arrow impossibility theorem

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.

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

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

The public choice model can be used to examine voting models that contrast the manner in which collective decisions are made by governments (state,local and federal)and the manner in which individual choices are made in markets.Which of the following descriptions is consistent with the difference between collective decision-making and decision-making in markets?

If the government is most interested in minimizing excess burden of an excise tax,should it impose the tax on goods that are elastic or on goods that are inelastic?

As the value of the Gini coefficient approaches zero

What is the difference between the voting paradox and the Arrow impossibility theorem?

Explain the effect of price elasticities of supply and demand on tax incidence.

Table 18-1 Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1) Subsidies for education, 2) Research on Alzheimer's or 3) Increased border security. Table 18-1 shows three voters' rankings of the alternatives. -Refer to Table 18-1.Suppose a series of votes are taken in which each pair of alternatives is considered in turn.If the vote is between allocating funds to education subsidies and increased border security

Describe each of the principles governments consider when deciding which taxes to use.

A key assumption of the public choice model is that government policymakers will pursue their own self-interests.Economists assume that consumers and firms pursue their own self-interests when they interact in competitive markets and this interaction results in efficient economic outcomes.Does the pursuit of self-interest by policymakers result in efficient economic outcomes?

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

"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

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

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

Income inequality increases as the Gini coefficient approaches 1.

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