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

When the demand for a product is more elastic than the supply

A statistical tool used to measure inequality is

Compare the distribution of income in the United States with the distribution of income in other high-income countries.

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

The median voter theorem states that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

As a group,people with high incomes are likely to have

If official poverty statistics for the United States included transfer payments individuals receive from the government,such as Social Security payments and other non-cash benefits such as food stamps,

The Gini coefficient is measured by

Between 1980 and 2011,income inequality in the United States has increased in part due to expanding international trade.How does expanding international trade contribute to income inequality?

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.

Which of the following statements refers to rent seeking?

Between 1970 and 2006,the poverty rate in East Asia declined dramatically from about 60 percent to less than 2 percent,while the poverty rate in Sub-Saharan Africa decreased from 40 percent to only 32 percent.The main reason for this is that

Suppose the government imposes an 8 percent 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.)

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

The largest source of revenue for the federal government of the United States is from

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle is called

Article Summary In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state's pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be used for funding general education. The Colorado legislature was weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent an excise tax on growers. Washington has set a tax rate of 44 percent on consumers and 25 percent each for growers and retailers. Since the legalization of marijuana is relatively new, projecting the economic impact of its sale is difficult, leading to many questions as to the quantities that will be produced and sold and what actual tax revenues will be generated. Source: Elizabeth Dwoskin, "Colorado and Washington Try to Figure Out How to Tax Marijuana," Bloomberg Businessweek, April 26, 2013. -Refer to the Article Summary.Colorado is weighing a proposal to tax marijuana at 30 percent,of which 15 percent would be a sales tax on consumers and 15 percent would be an excise tax on growers.Suppose the actual burden of the tax falls 80 percent on consumers and 20 percent on producers.In this case,consumers will actually bear the tax burden of ________ percent of the selling price and producers will actually bear the tax burden of ________ percent of the selling price.

If the government wants to minimize the welfare loss of a tax,it should tax goods with more inelastic demands or supplies.

Figure 18-6 Figure 18-6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 18-6.Which country has the more unequal distribution of income?

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