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

Many economists believe that when the federal government establishes an agency to regulate a particular industry, the regulated firms try to influence the agency even if these actions do not benefit the public. Economists refer to this result of government regulation by which of the following terms?

The distribution of income typically refers to how income is distributed across the population ________. Income mobility looks at how a person or family's income changes ________.

What is the term that explains why voters often lack knowledge of pending legislation, and lack knowledge of the views of candidates for office on a range of issues that affect their own (the voters') welfare?

Figure 18-1 -Refer to Figure 18-1. The excess burden of the tax is represented by the area

Figure 18-9 -Refer to Figure 18-9 to answer the following questions. a. Did the distribution of income become more equal in 2016 that it was in 2015, 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 2015 and the Gini coefficient for 2016.

If the marginal tax rate is less than the average tax rate as taxable income increases, the tax structure is

Which of the following is a transfer payment?

In the United States, taxpayers are allowed to exclude from taxation a certain amount of income, called

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, what is the size of the deadweight loss, if there is any?

Studies by the U.S. Census Bureau have shown that

In 2016, over 75 percent of the revenue of the U.S. federal government was raised through

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

Most businesses in the United States are sole proprietorships. Most sole proprietors pay ________ on their profits.

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

Table 18-4 -Refer to Table 18-4. The table above outlines the rankings of three members of the U.S. House of Representatives on three spending alternatives. Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom, Dick, and Harriet, all members of the House of Representatives, participate in a series of votes in which they are to determine which of the spending alternatives should receive funding. Three votes will be taken: (1) Foreign Aid and Post-Secondary Education (2) Foreign Aid and Roads and Bridges and (3) Post-Secondary Education and Roads and Bridges. Determine whether the voting paradox will occur as a result of these votes.

The term tax incidence refers to

Exemptions and deductions are used

When the demand for a product is less elastic than the supply, consumers pay the majority of the tax on the product.

In the United States, the largest source of funds for public schools is

Figure 18-8 -Refer to Figure 18-8 to answer the following questions. a. Did the distribution of income become more equal in 2016 than it was in 2015, or did it become less equal? Explain. b. If area A = 1,900, area B = 450, and area C = 2,650, calculate the Gini coefficient for 2015 and the Gini coefficient for 2016.