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

Which of the following is an example of a federal mandate?

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

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 Islandia.

A common belief among political analysts is that someone running for his or her party's nomination for president of the United States must choose a different strategy once the nomination is secured.To be nominated,the candidate must appeal to voters from one party - Democrat or Republican - but in a general election a party's nominee must appeal to voters from both parties as well as independent voters.Which of the following offers the best explanation for this change in strategy?

What is the difference between a marginal tax rate and an average tax rate? Which is more important in determining the impact of the tax system on economic behavior?

Figure 18-9 -Refer to Figure 18-9 to answer the following questions. a.Did the distribution of income become more equal in 2010 that it was in 2009,or did it become less equal? Explain. b.If area A = 1,600,area B = 200,and area C = 3,200,calculate the Gini coefficient for 2009 and the Gini coefficient for 2010.

Sheldon Cleaver commented on the difficulty people have in overcoming poverty in the United States: "Most people whose incomes fall below the poverty line have difficulty pulling themselves above the line in future years.In this sense,poverty becomes a vicious cycle.I believe the psychological damage households face when they are branded with the 'poverty' label in our society is a major factor in their remaining in poverty.Despair is a major reason why the percentage of people with incomes that lie below the poverty line never falls below 10 percent." Which of the following correctly evaluates Cleaver's statement?

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

The actual division of the burden of a tax is called

Logrolling refers to attempts by individuals to use government action to make themselves better off at the expense of others.

As the value of the Gini coefficient approaches one

The excess burden of a tax

A regressive tax is a tax for which people with lower incomes

A Gini coefficient of ________ means that an income distribution is perfectly equal and a Gini coefficient of ________ means the income distribution is perfectly unequal.

Figure 18-5 Figure 18-5 shows the Lorenz curve for a hypothetical country. -Refer to Figure 18-5.The middle 20 percent of households

If you pay $3,000 in taxes on an income of $28,000,and $4,450 in taxes on an income of $38,000,what is your marginal tax rate? Show your work.

If your income is $40,000 and you pay taxes of $4,650,what is your average tax rate? Show your work.

What is the relationship between market failure and government failure?

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 18-2.If the government imposes an excise tax of $1.00 on every unit sold,the government's revenue from the tax

Figure 18-4 -Refer to Figure 18-4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.