Exam 14: Public Goods and Tax Policy

Suppose a study that finds that the income elasticity of demand for a public good is greater than 1. This implies that the public good should be financed through a ________ income tax system.

When the federal government borrows money, the resulting ________ in interest rates will lead private investment to ________.

If a good is nonrival, then:

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. Resident Reservatim Price Incame Kris \ 100 \ 1,000 Taylor \ 200 \ 5,000 Max \ 700 \ 6,000   If the government proposes to pay for the public good with a proportional income tax of 8 percent, then:

If one state is suffering from acid rain as a result of sulfur dioxide emissions from the industries in a neighboring state, then:

To derive the market demand curve for a private good, one sums the ________. For a public good, one sums the ________.

Which of the following items is an example of a good that is nonrival but excludable?

Under a head tax, the amount of tax paid is:

Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy. Will values a fence between their yards at $250 and Grace values a fence between their yards at $200. The cost of building the fence is $300, which will be split equally if they both agree to build the fence. Therefore, their payoff matrix is as follows.    Will's dominant strategy in this game is to:

Will and Grace have adjoining unfenced back yards and each has just adopted a new puppy. Will values a fence between their yards at $250 and Grace values a fence between their yards at $200. The cost of building the fence is $300, which will be split equally if they both agree to build the fence. Therefore, their payoff matrix is as follows.   This game is a(n)________ because ________.

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. Cheap Charlie is one of Towneburg's 20 residents. While Charlie enjoys fireworks as much as the next Towneburger, when the fireworks fund-raising campaign kicks off, he claims to hate them. Cheap Charlie is trying to:

A proportional tax results in:

Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. Resident Reservatim Price Incame Kris \ 100 \ 1,000 Taylor \ 200 \ 5,000 Max \ 700 \ 6,000   If the government proposes to pay for the public good with a head tax of $300 per resident, then

Joe earns $10,000 in income and pays $1,000 in taxes while Jack earns $30,000 and pays $4,000 in taxes. The structure of this tax is:

There are 20 residents in the village of Towneburg. The size of the village's annual fireworks display depends upon the number of shells that are fired off. Each resident's demand for fireworks is shown below. The total cost of the fireworks display is $1,000 plus $10 per shell. What is the horizontal intercept of the village's demand curve for fireworks?

Collective goods tend to be underprovided by private markets because:

Which of the following is NOT an example of a public good?

If the popular television show The Bachelor is shown on pay-per-view television every Monday at 9pm, then the demand curve for each episode is given below. If the regulated pay-per-view charge is decreased from $20 to $0 per household, what would be the gain in total economic surplus?

Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below. If the park is currently 2 acres, and land costs $20 per acre, the town should:

If all taxpayers pay the same dollar amount, the tax is termed a: