Question 1

Refer to the income tax schedule given in the table. The tax represented is

Accepted Answer

A) optimal. 
B) proportional. 
C) regressive. 
D) progressive. 
A) optimal. 
B) proportional. 
C) regressive. 
D) progressive.

Question 2

Assume you pay a tax of $6,000 on a taxable income of $40,000. If your taxable income were $50,000, your tax payment would be $7,000. This suggests that the tax is

Accepted Answer

A) proportional. 
B) regressive. 
C) progressive. 
D) discriminatory. 
A) proportional. 
B) regressive. 
C) progressive. 
D) discriminatory.

Question 3

The table gives data for the market for a product. If an excise tax of $3 per unit is imposed on this product, the tax revenue for the government will be

Accepted Answer

A) $60. 
B) $50. 
C) $90. 
D) $70. 
A) $60. 
B) $50. 
C) $90. 
D) $70.

Question 4

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (6)might represent

Accepted Answer

A) the payment of payroll taxes by households. 
B) corporate income tax payments. 
C) the employment of teachers by the Ogallala school district. 
D) the purchase of armored personnel vehicles by government. 
A) the payment of payroll taxes by households. 
B) corporate income tax payments. 
C) the employment of teachers by the Ogallala school district. 
D) the purchase of armored personnel vehicles by government.

Question 5

One difference between sales and excise taxes is that

Accepted Answer

A) sales taxes are only applied at the state level, while excise taxes are only applied at the federal level. 
B) excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. 
C) sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis. 
D) excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis. 
A) sales taxes are only applied at the state level, while excise taxes are only applied at the federal level. 
B) excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. 
C) sales taxes are calculated as a percentage of the price paid, while excise taxes are levied on a per-unit basis. 
D) excise taxes are calculated as a percentage of the price paid, while sales taxes are levied on a per-unit basis.

Question 6

The tax that is most difficult to shift to others would be

Accepted Answer

A) the personal income tax. 
B) the corporate income tax. 
C) specific excise taxes. 
D) business property taxes. 
A) the personal income tax. 
B) the corporate income tax. 
C) specific excise taxes. 
D) business property taxes.

Question 7

Education is the largest expenditure item for state governments as well as local governments in the U.S.

Accepted Answer

A) True 
 B)False

Question 8

(Advanced analysis)The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 1 + 0.4 Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 2 + 0.4 Q. Government's revenue from this tax is

Accepted Answer

A) $1,000. 
B) $1,125. 
C) $875. 
D) $1,400. 
A) $1,000. 
B) $1,125. 
C) $875. 
D) $1,400.

Question 9

Refer to the income tax schedule given in the table. The tax represented is

Accepted Answer

A) optimal. 
B) proportional. 
C) regressive. 
D) progressive. 
A) optimal. 
B) proportional. 
C) regressive. 
D) progressive.

Question 10

In the figure, S is the before-tax supply curve and Sₜ is the supply curve after an excise tax is imposed. The efficiency loss of this tax will be area

Accepted Answer

A) ABCE. 
B) ABCE + ECF. 
C) 0 AEG. 
D) ECF. 
A) ABCE. 
B) ABCE + ECF. 
C) 0 AEG. 
D) ECF.

Question 11

Economists agree that corporations always shift the corporate income tax to consumers by raising product prices.

Accepted Answer

A) True 
 B)False

Question 12

About two-thirds of all federal spending is for national defense.

Accepted Answer

A) True 
 B)False

Question 13

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a proportional tax schedule throughout?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 14

Which of the following is the most important source of tax revenue for state governments?

Accepted Answer

A) personal income tax 
B) property taxes 
C) sales and excise taxes 
D) corporate income tax 
A) personal income tax 
B) property taxes 
C) sales and excise taxes 
D) corporate income tax

Question 15

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the efficiency (or deadweight)loss due to the excise tax?

Accepted Answer

A) $6 
B) $9 
C) $18 
D) $21 
A) $6 
B) $9 
C) $18 
D) $21

Question 16

If the marginal tax rate is 25 percent, by how much must income have increased if your tax bill increases by $200?

Accepted Answer

A) $200 
B) $50 
C) $800 
D) The amount cannot be determined. 
A) $200 
B) $50 
C) $800 
D) The amount cannot be determined.

Question 17

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the total amount of tax revenue going to the government?

Accepted Answer

A) $77 
B) $80 
C) $42 
D) $56 
A) $77 
B) $80 
C) $42 
D) $56

Question 18

In determining one's personal income tax, taxable income is

Accepted Answer

A) total income less deductions and exemptions. 
B) all income. 
C) all income other than wages and salaries. 
D) wage and salary income only. 
A) total income less deductions and exemptions. 
B) all income. 
C) all income other than wages and salaries. 
D) wage and salary income only.

Question 19

Given supply, the more inelastic the demand for a product, the larger the portion of an excise tax that is shifted to consumers.

Accepted Answer

A) True 
 B)False

Question 20

In 2016, the top 1 percent of all taxpayers in the United States paid what percentage of the federal income tax?

Accepted Answer

A) 26.7 percent 
B) 37.3 percent 
C) 45 percent 
D) 58.2 percent 
A) 26.7 percent 
B) 37.3 percent 
C) 45 percent 
D) 58.2 percent

Exam 20: Public Finance: Expenditures and Taxes

Refer to the income tax schedule given in the table. The tax represented is

Assume you pay a tax of $6,000 on a taxable income of $40,000. If your taxable income were $50,000, your tax payment would be $7,000. This suggests that the tax is

The table gives data for the market for a product. If an excise tax of $3 per unit is imposed on this product, the tax revenue for the government will be

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (6)might represent

One difference between sales and excise taxes is that

The tax that is most difficult to shift to others would be

Education is the largest expenditure item for state governments as well as local governments in the U.S.

Refer to the income tax schedule given in the table. The tax represented is

In the figure, S is the before-tax supply curve and Sₜ is the supply curve after an excise tax is imposed. The efficiency loss of this tax will be area

Economists agree that corporations always shift the corporate income tax to consumers by raising product prices.

About two-thirds of all federal spending is for national defense.

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a proportional tax schedule throughout?

Which of the following is the most important source of tax revenue for state governments?

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the efficiency (or deadweight)loss due to the excise tax?

If the marginal tax rate is 25 percent, by how much must income have increased if your tax bill increases by $200?

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the total amount of tax revenue going to the government?

In determining one's personal income tax, taxable income is

Given supply, the more inelastic the demand for a product, the larger the portion of an excise tax that is shifted to consumers.

In 2016, the top 1 percent of all taxpayers in the United States paid what percentage of the federal income tax?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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