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

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

An example of a payroll tax in the United States is

There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?

What is meant by the term "rational ignorance"?

Last year, Anthony Millanti earned exactly $30,000 of taxable income. Assume that the income tax system used to determine Anthony's tax liability is progressive. The table below lists the tax brackets and the marginal tax rates that apply to each bracket. a. Draw a new table that lists the amounts of income tax that Anthony is obligated to pay for each tax bracket, and the total tax he owes the government. (Assume that there are no allowable tax deductions, tax credits, personal exemptions, or any other deductions that Anthony can use to reduce his tax liability). b. Determine Anthony's average tax rate.

Absolute poverty measures vary from country to country. For example, in 2017, the poverty line in the United States for a family of four was an annual income of $24,600 but economists often use a much lower threshold income of $1.25 per day when calculating the rate of poverty in poor countries. Using this $1.25-per-day measure of the poverty line, which of the following regions had the smallest percentage decrease in the percentage of the population in poverty from 1970 to 2010?

The actual division of the burden of a tax is called

Which of the following tax systems would help reduce income inequality the most?

The federal government and some state governments levy taxes on specific goods such as gasoline, cigarettes, and beer. These are known as

In reference to the federal income tax system, a tax bracket is

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

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole. Which of the following explanations for Flack's vote is most consistent with the public choice model?

According to the benefits-received principle, those who receive the benefits from a government program should pay the taxes that support the program.

Which of the following statements about rent seeking is false?

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

What is the poverty rate?

At the state and local levels in the United States, the largest source of tax revenue is

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

Table 18-1 Suppose $1 billion is available in the budget and Congress is considering allocating the funds to one of the following three alternatives: 1) Subsidies for education, 2) Research on Alzheimer's or 3) Increased border security. Table 18-1 shows three voters' rankings of the alternatives. -Refer to Table 18-1. Suppose a series of votes are taken in which each pair of alternatives is considered in turn. If the vote is between allocating funds to research on Alzheimer's and increased border security

Measures of poverty (for example, the poverty line) and the distribution of income (for example, the Lorenz curve and the Gini coefficient) are misleading for which of the following two reasons?