Question 1

Ad valorem taxes create tax wedges just like unit taxes.

Accepted Answer

A) True 
 B)False  True

Question 2

Statutory incidence of a tax deals with

Accepted Answer

A) the amount of revenue left over after taxes. 
B) the amount of taxes paid after accounting for inflation. 
C) the person(s)legally responsible for paying the tax. 
D) the amount of tax revenue generated after a tax is imposed. 
A) the amount of revenue left over after taxes. 
B) the amount of taxes paid after accounting for inflation. 
C) the person(s)legally responsible for paying the tax. 
D) the amount of tax revenue generated after a tax is imposed. C

Question 3

Suppose that demand is perfectly inelastic.Supply is normal and upward sloping.What is the economic incidence of a unit tax placed on suppliers?

Accepted Answer

The economic incidence of the tax is paid entirely by the consumers.

Question 4

A unit tax is a fixed amount per unit of a commodity sold.

Accepted Answer

A) True 
 B)False

Question 5

Even with a tax,the price that consumers pay will be higher than what producers receive.

Accepted Answer

A) True 
 B)False

Question 6

Suppose there is a market that has market demand characterized as X = 30 - P/3.
Suppose further that market supply can be written as X = P/2 - 2.
(A)Find the equilibrium price and quantity in this market.
(B)If a unit tax of $16 is imposed on good X,what are the equilibrium price,quantity,and tax revenue in the market?
(C)Suppose an ad valorem tax of 30 percent is imposed on good X.The after-tax demand equation would be X = 30 - P/2.Now find the equilibrium price,quantity,and tax revenue in the market.
(D)What can be said about the amount of tax revenue generated under each taxing scheme,and why?

Accepted Answer

(A)Setting supply equal to demand and so

Question 7

Taxes

Accepted Answer

A) are mandatory payments. 
B) are necessary for financing government expenditures. 
C) do not directly relate to the benefit of government goods and services received. 
D) are all of the above. 
A) are mandatory payments. 
B) are necessary for financing government expenditures. 
C) do not directly relate to the benefit of government goods and services received. 
D) are all of the above.

Question 8

When marginal tax rates are constant,

Accepted Answer

A) the change in taxes paid is the same as the change in income. 
B) the change in taxes paid is greater than the change in income. 
C) the change in taxes paid is less than the change in income. 
D) there are no taxes. 
E) none of the above. 
A) the change in taxes paid is the same as the change in income. 
B) the change in taxes paid is greater than the change in income. 
C) the change in taxes paid is less than the change in income. 
D) there are no taxes. 
E) none of the above.

Question 9

A tax on suppliers will cause the supply curve to shift

Accepted Answer

A) up. 
B) down. 
C) right. 
D) left. 
A) up. 
B) down. 
C) right. 
D) left.

Question 10

Consider a monopolist who has a total cost curve of: TC=7X+(1/2)X2.The market demand equation is Xd=386-(1/2)P.
A)What are the equilibrium quantity,equilibrium price,and profits in this market?
B)Suppose that a unit tax of $1 is placed on the monopolist.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
C)Suppose that the same unit tax of $1 is placed on consumers.What happens to the equilibrium quantity,equilibrium price,and profits? How much tax revenue does the government generate?
D)What can be said about the taxes?

Accepted Answer

A)X* = 153,P* = $466,@#LAT-DLM&= $58522.5
B)X* = 1

Question 11

Why is it the case that a commodity tax on goods like food and shelter is sometimes seen as being regressive?

Accepted Answer

Items like food and shelter re

Question 12

Regardless of income level,when the ratio of taxes paid to income is constant then it is called

Accepted Answer

A) lump sum tax 
B) marginal tax 
C) progressive tax 
D) proportional tax 
A) lump sum tax 
B) marginal tax 
C) progressive tax 
D) proportional tax

Question 13

Demand for cigarettes is

Accepted Answer

A) relatively elastic. 
B) relatively inelastic. 
C) increasing in the US. 
D) greater among wealthier people. 
A) relatively elastic. 
B) relatively inelastic. 
C) increasing in the US. 
D) greater among wealthier people.

Question 14

General equilibrium refers to

Accepted Answer

A) examining markets without specific information. 
B) finding equilibrium from general information. 
C) pricing goods at their shadow price. 
D) all of the above. 
E) none of the above. 
A) examining markets without specific information. 
B) finding equilibrium from general information. 
C) pricing goods at their shadow price. 
D) all of the above. 
E) none of the above.

Question 15

Partial factor taxes are levied on an input in only some of its uses.

Accepted Answer

A) True 
 B)False

Question 16

A tax on consumers will cause the demand curve to shift

Accepted Answer

A) right. 
B) left. 
C) up. 
D) down. 
A) right. 
B) left. 
C) up. 
D) down.

Question 17

Unit taxes cause shifts,while ad valorem taxes cause pivots.

Accepted Answer

A) True 
 B)False

Question 18

Due to capitalization,the burden of future taxes may be borne by current owners of an inelastically?supplied,durable commodity such as land.

Accepted Answer

A) True 
 B)False

Question 19

An oligopoly has ______ sellers in the market.

Accepted Answer

A) 0 
B) 1 
C) 3 
D) many 
A) 0 
B) 1 
C) 3 
D) many

Question 20

A monopoly has ______ seller(s)in the market.

Accepted Answer

A) 0 
B) 1 
C) 3 
D) many 
A) 0 
B) 1 
C) 3 
D) many

Ad valorem taxes create tax wedges just like unit taxes.

Statutory incidence of a tax deals with

Suppose that demand is perfectly inelastic.Supply is normal and upward sloping.What is the economic incidence of a unit tax placed on suppliers?

A unit tax is a fixed amount per unit of a commodity sold.

Even with a tax,the price that consumers pay will be higher than what producers receive.

Taxes

When marginal tax rates are constant,

A tax on suppliers will cause the supply curve to shift

Why is it the case that a commodity tax on goods like food and shelter is sometimes seen as being regressive?

Regardless of income level,when the ratio of taxes paid to income is constant then it is called

Demand for cigarettes is

General equilibrium refers to

Partial factor taxes are levied on an input in only some of its uses.

A tax on consumers will cause the demand curve to shift

Unit taxes cause shifts,while ad valorem taxes cause pivots.

Due to capitalization,the burden of future taxes may be borne by current owners of an inelastically?supplied,durable commodity such as land.

An oligopoly has ______ sellers in the market.

A monopoly has ______ seller(s)in the market.

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

The Health Care Market

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters

Exam 14: Taxation and Income Distribution

Ad valorem taxes create tax wedges just like unit taxes.

Statutory incidence of a tax deals with

Suppose that demand is perfectly inelastic.Supply is normal and upward sloping.What is the economic incidence of a unit tax placed on suppliers?

A unit tax is a fixed amount per unit of a commodity sold.

Even with a tax,the price that consumers pay will be higher than what producers receive.

Taxes

When marginal tax rates are constant,

A tax on suppliers will cause the supply curve to shift

Why is it the case that a commodity tax on goods like food and shelter is sometimes seen as being regressive?

Regardless of income level,when the ratio of taxes paid to income is constant then it is called

Demand for cigarettes is

General equilibrium refers to

Partial factor taxes are levied on an input in only some of its uses.

A tax on consumers will cause the demand curve to shift

Unit taxes cause shifts,while ad valorem taxes cause pivots.

Due to capitalization,the burden of future taxes may be borne by current owners of an inelastically?supplied,durable commodity such as land.

An oligopoly has ______ sellers in the market.

A monopoly has ______ seller(s)in the market.

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

The Health Care Market

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters