Exam 6: Funding the Public Sector

-Using the above figure, if the government levies a new unit tax in this market, S represents the original supply curve, and St represents the after-tax supply curve, then the after-tax price paid by consumers is the vertical distance from the origin to

The tax that brings in the most revenue in the United States is the

Mr. Smith earns $100,000 per year. Each year he spends $50,000 and saves $50,000. He pays a 5 percent sales tax on all of his spending. Assuming the sales tax is the only tax he pays, his average tax rate out of his income is

Dynamic tax analysis assumes that

Over the long run, a government's fundamental source of revenues is

Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family A has income of $82,000 while Family B has income of $37,000. What are the marginal tax rates faced by the two families?

Another name for a "flat-rate tax" in which the same tax rate applies to all income earners is a

Explain why it is that how much consumers pay for an excise tax depends on how responsive they are to a given change in market price.

Suppose the tax rate on the first $10,000 of income is 0 percent; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on income over $60,000. Family A has an income of $55,000. What is the tax liability of Family A?

The government budget constraint implies that

Suppose you purchased 500 shares of stock in 2013 for $15 a share, and the price now is $20 a share. If you sell the stock, then your capital gain is

Retained earnings are

An excise tax

The imposition of a unit excise tax on beer will

The U.S. Social Security tax is an example of a

Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family A has income of $100,000 while Family B has income of $40,000. The marginal tax rates faced by the two families are

When income is $15,000, the amount of income taxes owed is $2,000; when income increases to $20,000, the amount owed increases to $3,000. The average income tax rate when a person earns $15,000 is

What happens when the government imposes a unit excise tax on a good?

Jamal earns $160,000 per year and Josephina earns $80,000 per year. They both pay the same price to buy the identical automobile and each pays $1,600 in sales tax. In relation to their relative incomes, this is an example of a

To set a tax rate at the appropriate level to maximize its tax revenues, a government must engage in