Exam 16: The Distribution of Income and Social Policy

The 'ability-to-pay' principle of taxation is the normative idea that

Figure 16.3 -Refer to Figure 16.3.The figure above shows a demand curve and two supply curves, one more elastic than the other.Use Figure 16-3 to answer the following questions. a.Suppose the government imposes an excise tax of $1.00 on every unit sold.Use the graph to illustrate the impact of this tax. b.If the government imposes an excise tax of $1.00 on every unit sold, will the consumer pay more of the tax if the supply curve is S₁ or S₂? Refer to the graphs in your answer. c.If an excise tax of $1.00 on every unit sold is imposed, will the revenue collected by the government be greater if the supply curve is S₁ or S₂? d.If the government imposes an excise tax of $1.00 on every unit sold, will the deadweight loss be greater if the supply curve is S₁ or S₂?

Figure 16.7 Figure 16.7 shows the Lorenz curve for a hypothetical country. -Refer to Figure 16.7.The second highest 20 per cent of households

Figure 16.4 -Refer to Figure 16.4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.

Figure 16.1 -Refer to Figure 16.1.Of the tax revenue collected by the government, the portion borne by producers is represented by the area

The corporate income tax is ultimately paid by all of the following except

What happens when the demand for a product is more elastic than the supply?

Which formula below would a taxpayer use to calculate an average tax rate?

Why do economists argue that the corporate income tax is an example of a tax with a high deadweight loss?

Since lower-income people spend a larger proportion of their incomes on groceries than do higher-income people, if grocery stores were required by law to charge a 10-cent fee for disposable bags, this fee could be considered

Figure 16.6 Figure 16.6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 16.6.If area X = 2060, area Y = 240, and area Z= 2700, calculate the Gini coefficient for Syldavia.

Which of the following summarises the information provided by a Lorenz curve?

According to the benefits-received principle, those who receive the benefits from a government program should pay the taxes that support the program.

Describe the main factors economists believe cause inequality of income.

Figure 16.1 -Refer to Figure 16.1.Area F + G represents

If you pay $3000 in taxes on an income of $30 000, and a tax of $3600 on an income of $40 000, then over this range of income the tax is

Which formula below would a taxpayer use to calculate marginal tax rate?

If the government wants to minimise the welfare loss of a tax, it should tax goods with more inelastic demands or supplies.

What is a statistical tool used to measure inequality?

A marginal tax rate is