Question 1

Table 12-1  
-Refer to Table 12-1.If Tressa makes $40,000 this year at her new job,what would her tax liability be,approximately

Accepted Answer

A) $4058 
B) $6000 
C) $7500 
D) $10,450 
A) $4058 
B) $6000 
C) $7500 
D) $10,450

Question 2

Scenario 12-1
Suppose Jeremy and Kelsey receive great satisfaction from their consumption of turkey.Kelsey would be willing to purchase only one slice and would pay up to $5 for it.Jeremy would be willing to pay $8 for his first slice, $6 for his second slice, and $2 for his third slice.The current market price is $2 per slice.
-Refer to Scenario 12-1.If a tax of $4 is levied on each slice of turkey,who bears the deadweight loss

Accepted Answer

A) Jeremy will bear the full burden of the deadweight loss. 
B) Kelsey will bear the full burden of the deadweight loss. 
C) Both Kelsey and Jeremy will share the burden of the deadweight loss. 
D) There will be no deadweight loss. 
A) Jeremy will bear the full burden of the deadweight loss. 
B) Kelsey will bear the full burden of the deadweight loss. 
C) Both Kelsey and Jeremy will share the burden of the deadweight loss. 
D) There will be no deadweight loss.

Question 3

Which tax is levied on the total amount spent in retail stores

Accepted Answer

A) sales tax 
B) excise tax 
C) retail tax 
D) commercial tax 
A) sales tax 
B) excise tax 
C) retail tax 
D) commercial tax

Question 4

What will a tax on all forms of income do

Accepted Answer

A) It will lower the effective rate of interest on savings. 
B) It will increase the potential income from saving. 
C) It will increase the amount of income received in the economy. 
D) It will enhance the incentives to save. 
A) It will lower the effective rate of interest on savings. 
B) It will increase the potential income from saving. 
C) It will increase the amount of income received in the economy. 
D) It will enhance the incentives to save.

Question 5

What are the three largest categories of spending by the federal government in order from first to third

Accepted Answer

A) Old Age Security, EI, CHST 
B) equalization, CHST, Old Age Security 
C) CHST, EI, Old Age Security 
D) CHST, Old Age Security, EI 
A) Old Age Security, EI, CHST 
B) equalization, CHST, Old Age Security 
C) CHST, EI, Old Age Security 
D) CHST, Old Age Security, EI

Question 6

What is the difference between vertical equity and horizontal equity,and how are they evaluated?

Accepted Answer

Vertical equity states that taxpayers wi

Question 7

Table 12-1  
-Refer to Table 12-1.If Morgan makes $142,700 this year,what would her tax liability be,approximately

Accepted Answer

A) $26,502 
B) $37,102 
C) $41,383 
D) $50,659 
A) $26,502 
B) $37,102 
C) $41,383 
D) $50,659

Question 8

When is the marginal tax rate for a taxpayer necessarily equal to his average tax rate

Accepted Answer

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

Question 9

-Refer to Table 12-8.Which tax illustrates a progressive tax

Accepted Answer

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

Question 10

In 2014,approximately how much did the average Canadian pay to the federal government

Accepted Answer

A) $3000 
B) $5600 
C) $6500 
D) $7600 
A) $3000 
B) $5600 
C) $6500 
D) $7600

Question 11

Deadweight losses arise because a tax causes some individuals to change their behaviour.

Accepted Answer

A) True 
 B)False

Question 12

Why is corporate tax more popular among voters

Accepted Answer

A) Equity considerations are more easily satisfied than efficiency considerations when corporate income is taxed. 
B) The corporate income tax does not distort the incentives of customers. 
C) The corporate income tax is the best example of why the flypaper theory of tax incidence is correct. 
D) Many economists believe that workers and customers bear much of the burden of the corporate income tax. 
A) Equity considerations are more easily satisfied than efficiency considerations when corporate income is taxed. 
B) The corporate income tax does not distort the incentives of customers. 
C) The corporate income tax is the best example of why the flypaper theory of tax incidence is correct. 
D) Many economists believe that workers and customers bear much of the burden of the corporate income tax.

Question 13

What is the ranking of these taxes from most to least important to the federal government

Accepted Answer

A) personal income taxes, corporate income taxes, EI payroll taxes 
B) EI payroll taxes, corporate income taxes, personal income taxes 
C) corporate income taxes, personal income taxes, EI payroll taxes 
D) corporate income taxes, EI payroll taxes, personal income taxes 
A) personal income taxes, corporate income taxes, EI payroll taxes 
B) EI payroll taxes, corporate income taxes, personal income taxes 
C) corporate income taxes, personal income taxes, EI payroll taxes 
D) corporate income taxes, EI payroll taxes, personal income taxes

Question 14

Martavius faces a progressive federal income tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 50 percent on all additional income.In addition,he must pay five percent of his income in provincial income tax and 15.3 percent of his labour income in federal payroll taxes.Martavius earns $70,000 per year in salary and another $20,000 per year in nonlabour income.What is his average tax rate,and what is the marginal tax rate on his salary

Accepted Answer

A) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 55 percent. 
B) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 70.3 percent. 
C) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 55 percent. 
D) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 70.3 percent. 
A) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 55 percent. 
B) His average tax rate is 50.23 percent, and the marginal tax rate on his salary is 70.3 percent. 
C) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 55 percent. 
D) His average tax rate is 53.63 percent, and the marginal tax rate on his salary is 70.3 percent.

Question 15

What is the largest source of income for the federal government

Accepted Answer

A) personal income taxes 
B) corporate taxes 
C) fines and penalties 
D) EI payroll taxes 
A) personal income taxes 
B) corporate taxes 
C) fines and penalties 
D) EI payroll taxes

Question 16

Since 1980,what has happened as the economy's income has grown

Accepted Answer

A) Tax rates have fallen as a percentage of total income. 
B) Tax revenues have fallen as a percentage of total income. 
C) Household after-tax income has fallen. 
D) Governments took larger portions of total income as taxes through the 1990s and then took smaller portions since the late 1990s. 
A) Tax rates have fallen as a percentage of total income. 
B) Tax revenues have fallen as a percentage of total income. 
C) Household after-tax income has fallen. 
D) Governments took larger portions of total income as taxes through the 1990s and then took smaller portions since the late 1990s.

Question 17

Which statement shows the percentage of total income the Canadian government took as taxes in 1980 and 2013

Accepted Answer

A) In 1980, the government collected 16 percent of total income; in 2013, it collected 46 percent. 
B) In 1980, the government collected 28 percent of total income; in 2013, it collected 13 percent. 
C) In 1980, the government collected 33 percent of total income; in 2013, it collected 35 percent. 
D) In 1980, the government collected 40 percent of total income; in 2013, it collected 38 percent. 
A) In 1980, the government collected 16 percent of total income; in 2013, it collected 46 percent. 
B) In 1980, the government collected 28 percent of total income; in 2013, it collected 13 percent. 
C) In 1980, the government collected 33 percent of total income; in 2013, it collected 35 percent. 
D) In 1980, the government collected 40 percent of total income; in 2013, it collected 38 percent.

Question 18

Which tax system requires higher income taxpayers to pay a higher percentage of their income in taxes

Accepted Answer

A) progressive 
B) proportional 
C) regressive 
D) percentage 
A) progressive 
B) proportional 
C) regressive 
D) percentage

Question 19

When does a budget deficit occur

Accepted Answer

A) when government receipts are less than spending 
B) when government spending is less than tax revenue 
C) when government receipts plus tax revenue is less than spending 
D) when government spending plus tax revenue is less than government receipts 
A) when government receipts are less than spending 
B) when government spending is less than tax revenue 
C) when government receipts plus tax revenue is less than spending 
D) when government spending plus tax revenue is less than government receipts

Question 20

Comparing a progressive tax with a lump-sum tax,which one is more efficient and which one is more fair,and why

Accepted Answer

We can use the marginal tax rate to eval

Table 12-1 -Refer to Table 12-1.If Tressa makes $40,000 this year at her new job,what would her tax liability be,approximately

Which tax is levied on the total amount spent in retail stores

What will a tax on all forms of income do

What are the three largest categories of spending by the federal government in order from first to third

What is the difference between vertical equity and horizontal equity,and how are they evaluated?

Table 12-1 -Refer to Table 12-1.If Morgan makes $142,700 this year,what would her tax liability be,approximately

When is the marginal tax rate for a taxpayer necessarily equal to his average tax rate

-Refer to Table 12-8.Which tax illustrates a progressive tax

In 2014,approximately how much did the average Canadian pay to the federal government

Deadweight losses arise because a tax causes some individuals to change their behaviour.

Why is corporate tax more popular among voters

What is the ranking of these taxes from most to least important to the federal government

What is the largest source of income for the federal government

Since 1980,what has happened as the economy's income has grown

Which statement shows the percentage of total income the Canadian government took as taxes in 1980 and 2013

Which tax system requires higher income taxpayers to pay a higher percentage of their income in taxes

When does a budget deficit occur

Comparing a progressive tax with a lump-sum tax,which one is more efficient and which one is more fair,and why

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

Application: 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 of Microeconomics

Filters

Exam 12: The Design of the Tax System

Table 12-1 -Refer to Table 12-1.If Tressa makes $40,000 this year at her new job,what would her tax liability be,approximately

Which tax is levied on the total amount spent in retail stores

What will a tax on all forms of income do

What are the three largest categories of spending by the federal government in order from first to third

What is the difference between vertical equity and horizontal equity,and how are they evaluated?

Table 12-1 -Refer to Table 12-1.If Morgan makes $142,700 this year,what would her tax liability be,approximately

When is the marginal tax rate for a taxpayer necessarily equal to his average tax rate

-Refer to Table 12-8.Which tax illustrates a progressive tax

In 2014,approximately how much did the average Canadian pay to the federal government

Deadweight losses arise because a tax causes some individuals to change their behaviour.

Why is corporate tax more popular among voters

What is the ranking of these taxes from most to least important to the federal government

What is the largest source of income for the federal government

Since 1980,what has happened as the economy's income has grown

Which statement shows the percentage of total income the Canadian government took as taxes in 1980 and 2013

Which tax system requires higher income taxpayers to pay a higher percentage of their income in taxes

When does a budget deficit occur

Comparing a progressive tax with a lump-sum tax,which one is more efficient and which one is more fair,and why

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

Application: 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 of Microeconomics

Filters