Question 1

Part of the administrative burden of a tax is

Accepted Answer

A) the money people pay to the government in taxes. 
B) reducing the size of the market because of the tax. 
C) the hassle and expense of filling out tax forms that is imposed on taxpayers who comply with the tax. 
D) the cost of administering programs that use tax revenue. 
A) the money people pay to the government in taxes. 
B) reducing the size of the market because of the tax. 
C) the hassle and expense of filling out tax forms that is imposed on taxpayers who comply with the tax. 
D) the cost of administering programs that use tax revenue.

Question 2

Which of the following types of taxes achieves vertical equity: a proportional tax, regressive tax, and/or progressive tax?

Accepted Answer

proportion

Question 3

Under a progressive tax system, the marginal tax rate could be equal to the average tax rate only when a taxpayer

Accepted Answer

A) has a very high income. 
B) has a very low income. 
C) is self-employed. 
D) invests in a retirement plan. 
A) has a very high income. 
B) has a very low income. 
C) is self-employed. 
D) invests in a retirement plan.

Question 4

Lump-sum taxes are equitable but not efficient.

Accepted Answer

A) True 
 B)False

Question 5

Corporate income taxes are based on the amount of revenue a corporation earns.

Accepted Answer

A) True 
 B)False

Question 6

As the economy's income has grown, the government has

Accepted Answer

A) grown at about the same pace. 
B) grown at a faster pace. 
C) grown at a slower pace. 
D) shrunk. 
A) grown at about the same pace. 
B) grown at a faster pace. 
C) grown at a slower pace. 
D) shrunk.

Question 7

A family's tax liability is the amount of money it owes in taxes.

Accepted Answer

A) True 
 B)False

Question 8

In the United States, the marginal tax rate on individual federal income tax

Accepted Answer

A) decreases as income increases. 
B) increases as income increases. 
C) is constant at all income levels. 
D) applies only to payroll taxes. 
A) decreases as income increases. 
B) increases as income increases. 
C) is constant at all income levels. 
D) applies only to payroll taxes.

Question 9

The deadweight loss associated with a tax on a commodity is generated by

Accepted Answer

A) the consumers who still choose to consume the commodity but pay a higher price that reflects the tax. 
B) the consumers who choose to not consume the commodity that is taxed. 
C) all citizens who are able to use services provided by government. 
D) the consumers who are unable to avoid paying the tax. 
A) the consumers who still choose to consume the commodity but pay a higher price that reflects the tax. 
B) the consumers who choose to not consume the commodity that is taxed. 
C) all citizens who are able to use services provided by government. 
D) the consumers who are unable to avoid paying the tax.

Question 10

Most economists believe that a corporate income tax affects the stockholders of a corporation but not its employees or customers.

Accepted Answer

A) True 
 B)False

Question 11

Briefly describe some of the demographic trends that are predicted to increase the government's budget deficit.

Accepted Answer

Social Security and Medicare payments wi

Question 12

In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances.

Accepted Answer

A) True 
 B)False

Question 13

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

Accepted Answer

A) True 
 B)False

Question 14

​A lump-sum tax does not produce a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 15

"Income security" programs comprised 33 percent of the federal government's spending in 2011. Give a few examples of the programs included in this category.

Accepted Answer

Social Security, une

Question 16

Horizontal equity refers to a tax system in which individuals with similar incomes pay similar taxes.

Accepted Answer

A) True 
 B)False

Question 17

Define horizontal equity and briefly describe some features of the U.S. federal income tax system that may interfere with achieving it.

Accepted Answer

Horizontal equity is the idea that taxpa

Question 18

Define the average tax rate.

Accepted Answer

The average tax rate

Question 19

A tax levied on the total amount spent in retail stores is called

Accepted Answer

A) a sales tax. 
B) an excise tax. 
C) a retail tax. 
D) an income tax. 
A) a sales tax. 
B) an excise tax. 
C) a retail tax. 
D) an income tax.

Question 20

Suppose a country imposes a lump-sum tax of $5,000 on each individual in the country. What is the marginal income tax rate for an individual who earns $40,000 during the year?

Accepted Answer

A) 0% 
B) 10% 
C) More than 10% 
D) The marginal tax rate cannot be determined without knowing the entire tax schedule. 
A) 0% 
B) 10% 
C) More than 10% 
D) The marginal tax rate cannot be determined without knowing the entire tax schedule.

Exam 12: The Design of the Tax System

Part of the administrative burden of a tax is

Which of the following types of taxes achieves vertical equity: a proportional tax, regressive tax, and/or progressive tax?

Under a progressive tax system, the marginal tax rate could be equal to the average tax rate only when a taxpayer

Lump-sum taxes are equitable but not efficient.

Corporate income taxes are based on the amount of revenue a corporation earns.

As the economy's income has grown, the government has

A family's tax liability is the amount of money it owes in taxes.

In the United States, the marginal tax rate on individual federal income tax

The deadweight loss associated with a tax on a commodity is generated by

Most economists believe that a corporate income tax affects the stockholders of a corporation but not its employees or customers.

Briefly describe some of the demographic trends that are predicted to increase the government's budget deficit.

In practice, the U.S. income tax system is filled with special provisions that alter a family's tax based on its specific circumstances.

Individual income taxes generate roughly 25% of the tax revenue for the federal government.

​A lump-sum tax does not produce a deadweight loss.

"Income security" programs comprised 33 percent of the federal government's spending in 2011. Give a few examples of the programs included in this category.

Horizontal equity refers to a tax system in which individuals with similar incomes pay similar taxes.

Define horizontal equity and briefly describe some features of the U.S. federal income tax system that may interfere with achieving it.

Define the average tax rate.

A tax levied on the total amount spent in retail stores is called

Suppose a country imposes a lump-sum tax of $5,000 on each individual in the country. What is the marginal income tax rate for an individual who earns $40,000 during the year?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

A lump-sum tax does not produce a deadweight loss.