Question 1

Tax laws affect

Accepted Answer

A)  economic efficiency but not equity. 
B)  equity but not economic efficiency. 
C)  consumption and production, not efficiency and equity. 
D)  both efficiency and equity. 
A)  economic efficiency but not equity. 
B)  equity but not economic efficiency. 
C)  consumption and production, not efficiency and equity. 
D)  both efficiency and equity.

Question 2

Unlike the market process,in the political market it is possible for some individuals to receive very large benefits from the political process without any significant impact on their tax bills.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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

Accepted Answer

A)  because a person's preferences are more likely to be met with little effort in the political sphere but this is not the case when buying a car in the private marketplace 
B)  because it is less costly to acquire information about consumer items than it is about political candidates 
C)  because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome 
D)  because the effects of buying a car are long term while a member of Congress has a relatively short tenure 
A)  because a person's preferences are more likely to be met with little effort in the political sphere but this is not the case when buying a car in the private marketplace 
B)  because it is less costly to acquire information about consumer items than it is about political candidates 
C)  because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome 
D)  because the effects of buying a car are long term while a member of Congress has a relatively short tenure

Question 5

The political process is more likely to serve the interests of individuals whose preferences are in the middle,rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

Accepted Answer

A)  logrolling 
B)  the voting paradox 
C)  the Arrow impossibility theorem 
D)  the median voter theorem 
A)  logrolling 
B)  the voting paradox 
C)  the Arrow impossibility theorem 
D)  the median voter theorem

Question 6

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people,if grocery stores were required by law to charge a 10-cent fee for disposable bags,this fee could be considered a

Accepted Answer

A)  proportional tax. 
B)  progressive tax. 
C)  regressive tax. 
D)  income tax. 
A)  proportional tax. 
B)  progressive tax. 
C)  regressive tax. 
D)  income tax.

Question 7

The government of Silverado raises revenue through a general income tax paid by all its residents to operate the city's marina.The marina is used by private boat owners.This method of raising revenue to operate the marina is

Accepted Answer

A)  consistent with the benefits-received principle. 
B)  consistent with the ability-to-pay principle. 
C)  inconsistent with the benefits-received principle. 
D)  inconsistent with the ability-to-pay principle. 
A)  consistent with the benefits-received principle. 
B)  consistent with the ability-to-pay principle. 
C)  inconsistent with the benefits-received principle. 
D)  inconsistent with the ability-to-pay principle.

Question 8

If you pay $14,000 in taxes on an income of $125,000,and $17,400 in taxes on an income of $144,000,what is your marginal tax rate? Show your work.

Accepted Answer

Marginal tax rate =

Question 9

Is a typical person likely to gather more information when buying a new computer or when voting for a member of the U.S.Senate? Why?

Accepted Answer

The typical person is likely to gather m

Question 10

Consider a public good such as fire protection services.Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property.In this case

Accepted Answer

A)  the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle. 
B)  the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle. 
C)  both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor. 
D)  neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor. 
A)  the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle. 
B)  the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle. 
C)  both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor. 
D)  neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.

Question 11

A personal exemption refers to

Accepted Answer

A)  the tax rate that applies to a particular tax bracket. 
B)  the tax bracket that represents basic living expenses. 
C)  an amount representing basic living expenses that can be subtracted from income. 
D)  a dispensation that allows certain qualifying individuals not to pay federal taxes. 
A)  the tax rate that applies to a particular tax bracket. 
B)  the tax bracket that represents basic living expenses. 
C)  an amount representing basic living expenses that can be subtracted from income. 
D)  a dispensation that allows certain qualifying individuals not to pay federal taxes.

Question 12

Former Alabama Governor George Wallace ran for president several times,once as a third-party candidate in 1968.Wallace claimed there was "not a dime's worth of difference" between the Democratic and Republican parties during one of his campaigns.How does Wallace's comment relate to the median voter theorem?

Accepted Answer

To win his party's nomination for presid

Question 13

Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate

Accepted Answer

A)  determines how tax revenue will change as national income increases. 
B)  affects people's willingness to work, save, and invest. 
C)  always equals the average tax rate which is harder to measure. 
D)  determines how much revenue the government will have to spend. 
A)  determines how tax revenue will change as national income increases. 
B)  affects people's willingness to work, save, and invest. 
C)  always equals the average tax rate which is harder to measure. 
D)  determines how much revenue the government will have to spend.

Question 14

All Gini coefficients must lie between 0 and 1.The lower the value

Accepted Answer

A)  the more unequal the income distribution. 
B)  the closer the income distribution is to being equal. 
C)  the greater the degree of poverty. 
D)  the lower the degree of poverty according to the federal government's definition of poverty. 
A)  the more unequal the income distribution. 
B)  the closer the income distribution is to being equal. 
C)  the greater the degree of poverty. 
D)  the lower the degree of poverty according to the federal government's definition of poverty.

Question 15

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.Does this necessarily mean that each group will bear half the burden of the tax?

Accepted Answer

A)  Yes, since the taxes are divided equally between consumers and producers, each will bear half the burden. 
B)  Yes, despite the even split of the 30 percent tax, consumers and producers always bear equal burdens of a tax. 
C)  No, the burden of a tax is always 100 percent on the consumer. 
D)  No, the burden of the tax will depend on the elasticity of demand and supply. 
A)  Yes, since the taxes are divided equally between consumers and producers, each will bear half the burden. 
B)  Yes, despite the even split of the 30 percent tax, consumers and producers always bear equal burdens of a tax. 
C)  No, the burden of a tax is always 100 percent on the consumer. 
D)  No, the burden of the tax will depend on the elasticity of demand and supply.

Question 16

Public schools in the United States get most of their operating funds from

Accepted Answer

A)  government production and subsidies. 
B)  income taxes on corporate profits. 
C)  local property taxes. 
D)  tariffs collected on imported goods. 
A)  government production and subsidies. 
B)  income taxes on corporate profits. 
C)  local property taxes. 
D)  tariffs collected on imported goods.

Question 17

What is the voting paradox?

Accepted Answer

A)  the observation that less than 60 percent of those eligible to vote actually vote 
B)  the observation that majority voting may not always result in consistent choices 
C)  the idea that wealthy corporations are able to sway politicians to act in ways contrary to the desires of the majority 
D)  people are aware that their votes will not change the political outcome since these outcomes are predetermined by a group of influential politicians 
A)  the observation that less than 60 percent of those eligible to vote actually vote 
B)  the observation that majority voting may not always result in consistent choices 
C)  the idea that wealthy corporations are able to sway politicians to act in ways contrary to the desires of the majority 
D)  people are aware that their votes will not change the political outcome since these outcomes are predetermined by a group of influential politicians

Question 18

Table 18-9
   Table 18-9 shows the income tax brackets and tax rates for single taxpayers in Monrovia.
-Refer to Table 18-9.Calculate the income tax paid by Sylvia,a single taxpayer with an income of $70,000.

Accepted Answer

A)  $21,000 
B)  $15,740 
C)  $15,400 
D)  $13,475 
A)  $21,000 
B)  $15,740 
C)  $15,400 
D)  $13,475

Tax laws affect

Unlike the market process,in the political market it is possible for some individuals to receive very large benefits from the political process without any significant impact on their tax bills.

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

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

The political process is more likely to serve the interests of individuals whose preferences are in the middle,rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people,if grocery stores were required by law to charge a 10-cent fee for disposable bags,this fee could be considered a

The government of Silverado raises revenue through a general income tax paid by all its residents to operate the city's marina.The marina is used by private boat owners.This method of raising revenue to operate the marina is

If you pay $14,000 in taxes on an income of $125,000,and $17,400 in taxes on an income of $144,000,what is your marginal tax rate? Show your work.

Is a typical person likely to gather more information when buying a new computer or when voting for a member of the U.S.Senate? Why?

Consider a public good such as fire protection services.Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property.In this case

A personal exemption refers to

Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate

All Gini coefficients must lie between 0 and 1.The lower the value

Public schools in the United States get most of their operating funds from

What is the voting paradox?

Table 18-9 Table 18-9 shows the income tax brackets and tax rates for single taxpayers in Monrovia. -Refer to Table 18-9.Calculate the income tax paid by Sylvia,a single taxpayer with an income of $70,000.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Filters

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

Tax laws affect

Unlike the market process,in the political market it is possible for some individuals to receive very large benefits from the political process without any significant impact on their tax bills.

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

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

The political process is more likely to serve the interests of individuals whose preferences are in the middle,rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people,if grocery stores were required by law to charge a 10-cent fee for disposable bags,this fee could be considered a

The government of Silverado raises revenue through a general income tax paid by all its residents to operate the city's marina.The marina is used by private boat owners.This method of raising revenue to operate the marina is

If you pay $14,000 in taxes on an income of $125,000,and $17,400 in taxes on an income of $144,000,what is your marginal tax rate? Show your work.

Is a typical person likely to gather more information when buying a new computer or when voting for a member of the U.S.Senate? Why?

Consider a public good such as fire protection services.Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property.In this case

A personal exemption refers to

Policymakers focus on marginal tax rate changes when making changes in the tax code because the marginal tax rate

All Gini coefficients must lie between 0 and 1.The lower the value

Public schools in the United States get most of their operating funds from

What is the voting paradox?

Table 18-9 Table 18-9 shows the income tax brackets and tax rates for single taxpayers in Monrovia. -Refer to Table 18-9.Calculate the income tax paid by Sylvia,a single taxpayer with an income of $70,000.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: The Responsiveness of Demand and Supply

The Economics of Health Care

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Filters