Exam 7: Taxes

If a tax system is poorly designed,it may be possible to increase:

Use the following to answer question: -(Figure: A Market with a Tax)Use Figure: A Market with a Tax.Before the tax is imposed,consumer surplus is equal to the areas:

Use the following to answer question: -(Figure: The Market for Blue Jeans)Use Figure: The Market for Blue Jeans.The government recently levied a $10 tax on the producers of blue jeans.What area or areas in the graph identify tax revenue?

Use the following to answer question: -(Table: The Market for Fried Twinkies)Use Table: The Market for Fried Twinkies.The government decides to tax fried Twinkies at a rate of $0.30 per Twinkie and collect that tax from the producers.After paying the tax,producers will receive _____ per Twinkie,and they will sell _____ Twinkies after the tax.

An excise tax causes a loss in efficiency because taxes distort incentives.

Use the following to answer question: -(Figure and Table: The Market for Taxi Rides)Use Figure and Table: The Market for Taxi Rides.If the government imposes an excise tax of $1 per ride (causing the supply curve to shift upward by that amount),then the government will collect tax revenues of _____.However,the tax will cause a _____ deadweight loss to society.

Which tax is the LARGEST source of federal government revenue?

Use the following to answer question: -(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,the effect of an excise tax on gasoline in the short run is most likely illustrated by panel _____,and the greater share of the burden of the excise tax (shown by the tax wedge in each panel)is borne by _____.

Suppose Governor Meridias decides to initiate a state income tax.The first $50,000 of household income is tax-free,while any income above $50,000 is taxed at 10%.A household earning $50,000 has a marginal tax rate of _____% and a tax rate of _____%.

Use the following to answer question: -(Figure: A Market with a Tax)Use Figure: A Market with a Tax.The efficiency loss resulting from this tax is:

If personal income up to and including $30,000 is not taxed,income of $30,001 to $60,000 is taxed at 10%,and income over $60,000 is taxed at 25%,then a family earning an income of $100,000 will pay a n AVERAGE tax rate of _____%.

_____ tax is NOT a major source of revenue for the federal government.

If personal income up to and including $25,000 is not taxed,income of $25,001 to $50,000 is taxed at 10%,and income over $50,000 is taxed at 20%,then a family earning an income of $75,000 will pay a n AVERAGE tax rate of _____%.

The deadweight loss from an excise tax is largest if demand is _____ and supply is _____.

Tax cuts authorized between 2000 and 2004 tended to favor the rich,but the federal tax system remains progressive overall.However,taxes at the state and local level are regressive.

Use the following to answer question: -(Figure: Tax Incidence)Use Figure: Tax Incidence.All other things unchanged,when a good or service is characterized by a relatively elastic supply,as shown in panel _____,a greater share of the burden of an excise tax is borne by _____.

If the government imposes a $5 excise tax on leather shoes and the price of leather shoes does not change:

The two most important sources of federal revenue are the _____ taxes.

Sales taxes are considered to be:

Which tax reflects the ability-to-pay principle?