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

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

The average tax rate is calculated as

"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

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?

A statistical tool used to measure inequality is

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

Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: a.subsidies for education B.research on Alzheimer's C.increased border security If voters prefer a to b and b to c,then if preferences are transitive

If grocery stores were legally required to charge a 10-cent fee for disposable grocery bags,who would bear the largest burden of this fee?

The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the

What is meant by "tax incidence"?

Income Quintile Svetlana Percentage of Total Income Grodsky Percentage of Total Income Lowest 20\% 8\% 4\% Second quintile 12\% 10\% Third quintile 16\% 16\% Fourth quintile 20\% 24\% Highest 20\% 44\% 46\% Table 18-11 shows income distribution data for two countries.Use this data to answer the following questions. -Refer to Table 18-11. a.Draw a Lorenz curve for each country. b.Which country has the more equal distribution of income? c.Based on the Lorenz curves for the two countries,can you determine which country has the more progressive tax system? Explain your answer.

A marginal tax rate is calculated as

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

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

The median voter theorem will be an accurate predicator of the outcomes of elections

When the majority of voters have preferences very different from those of the median voter,then the median voter theorem will lead to accurate predictions of the outcomes of elections.

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

Figure 18-1 -Refer to Figure 18-1.The sales tax revenue collected by the government is represented by the area

Income Tax Bracket Marginal Tax Rate \ 0-6,000 10\% 6,001-20,000 15\% 20,001-44,500 22\% 44,501 and over 30\% Table 18-9 shows the income tax brackets and tax rates for single taxpayers in Monrovia. -Refer to Table 18-9.Sylvia is a single taxpayer with an income of $70,000.What is her marginal tax rate and what is her average tax rate?

A marginal tax rate is