Question 1

Exemptions and deductions are used

Accepted Answer

A)  to add to taxes that must be paid. 
B)  by taxpayers to reduce the amount of income subject to tax. 
C)  to determine the type of tax structure. 
D)  to determine what items are subject to sales taxes. 
A)  to add to taxes that must be paid. 
B)  by taxpayers to reduce the amount of income subject to tax. 
C)  to determine the type of tax structure. 
D)  to determine what items are subject to sales taxes.

Question 2

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

Accepted Answer

A)  is greater under the more elastic supply curve S0. 
B)  is greater under the less elastic supply curve S0. 
C)  is greater under the less elastic supply curve S1. 
D)  is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour. 
A)  is greater under the more elastic supply curve S0. 
B)  is greater under the less elastic supply curve S0. 
C)  is greater under the less elastic supply curve S1. 
D)  is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour.

Question 3

-Refer to Figure 16-5. The middle 20 per cent of households

Accepted Answer

A)  earn 20 per cent of the society's total income. 
B)  earn 36 per cent of the society's total income. 
C)  earn 48 per cent of the society's total income. 
D)  earn 50 per cent of the society's total income. 
A)  earn 20 per cent of the society's total income. 
B)  earn 36 per cent of the society's total income. 
C)  earn 48 per cent of the society's total income. 
D)  earn 50 per cent of the society's total income.

Question 4

A tax bracket is

Accepted Answer

A)  the per cent of taxable income paid in taxes at a specific income bracket. 
B)  the income range within which a particular tax rate applies. 
C)  the type of tax structure for which a range of taxes applies. 
D)  the range, from the high to the low tax rate, of a particular type of tax. 
A)  the per cent of taxable income paid in taxes at a specific income bracket. 
B)  the income range within which a particular tax rate applies. 
C)  the type of tax structure for which a range of taxes applies. 
D)  the range, from the high to the low tax rate, of a particular type of tax.

Question 5

-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?

Accepted Answer

than if the supply curve is S₁(

Question 6

-Refer to Figure 16-5. The highest 20 per cent of households

Accepted Answer

A)  earn 24 per cent of the society's total income. 
B)  earn 28 per cent of the society's total income. 
C)  earn 42 per cent of the society's total income. 
D)  earn 72 per cent of the society's total income. 
A)  earn 24 per cent of the society's total income. 
B)  earn 28 per cent of the society's total income. 
C)  earn 42 per cent of the society's total income. 
D)  earn 72 per cent of the society's total income.

Question 7

-Refer to Figure 16-6. If area X = 2060, area Y = 240, and area Z = 2700, calculate the Gini coefficient for Islandia.

Accepted Answer

A)  0.41 
B)  0.45 
C)  0.70 
D)  0.76 
A)  0.41 
B)  0.45 
C)  0.70 
D)  0.76

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

When considering changes in tax policy, economists usually focus on

Accepted Answer

A)  the average tax rate. 
B)  the marginal tax rate. 
C)  people's willingness to pay taxes. 
D)  people's ability to pay taxes. 
A)  the average tax rate. 
B)  the marginal tax rate. 
C)  people's willingness to pay taxes. 
D)  people's ability to pay taxes.

Question 10

Last year, Anthony Millanti earned exactly $30 000 of taxable income. Assume that the income tax system used to determine Anthony's tax liability is progressive. The table below lists the tax brackets and the marginal tax rates that apply to each bracket.
a. Draw a new table that lists the amounts of income tax that Anthony is obligated to pay for each tax bracket, and the total tax he owes the government. (Assume that there are no allowable tax deductions, tax credits, personal exemptions or any other deductions that Anthony can use to reduce his tax liability).
b. Determine Anthony's average tax rate.

Accepted Answer

a.
 @#IMG-DLM& b. The average tax rate i

Question 11

If your income is $40 000 and you pay taxes of $4650, what is your average tax rate? Show your work.

Accepted Answer

Average tax rate = $

Question 12

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

Accepted Answer

A)  is Pa - Pd under either supply curve. 
B)  is Pb - Pe under either supply curve. 
C)  is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1. 
D)  is Pc - Pd if the supply curve is S0 and Pc - Pe if the supply curve is S1. 
A)  is Pa - Pd under either supply curve. 
B)  is Pb - Pe under either supply curve. 
C)  is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1. 
D)  is Pc - Pd if the supply curve is S0 and Pc - Pe if the supply curve is S1.

Question 13

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold,

Accepted Answer

A)  the deadweight loss is identical under either supply curve. 
B)  the deadweight loss is greater under the supply curve S1. 
C)  the deadweight loss is greater under the supply curve S0. 
D)  there is no deadweight loss since revenue raised is used to fund government projects. 
A)  the deadweight loss is identical under either supply curve. 
B)  the deadweight loss is greater under the supply curve S1. 
C)  the deadweight loss is greater under the supply curve S0. 
D)  there is no deadweight loss since revenue raised is used to fund government projects.

Question 14

As the value of the Gini coefficient approaches one,

Accepted Answer

A)  income distribution becomes less unequal. 
B)  income distribution becomes more unequal. 
C)  the percentage of the population under the poverty line increases. 
D)  the percentage of the population under the poverty line decreases. 
A)  income distribution becomes less unequal. 
B)  income distribution becomes more unequal. 
C)  the percentage of the population under the poverty line increases. 
D)  the percentage of the population under the poverty line decreases.

Question 15

The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the

Accepted Answer

A)  ability-to-pay principle. 
B)  vertical-equity principle. 
C)  horizontal-equity principle. 
D)  benefits-received principle. 
A)  ability-to-pay principle. 
B)  vertical-equity principle. 
C)  horizontal-equity principle. 
D)  benefits-received principle.

Question 16

How would the elimination of a sales tax affect the market for a product that had been subject to the tax?

Accepted Answer

A)  The demand for the product would rise and the equilibrium price would fall by the amount of the tax. 
B)  The equilibrium price for the product would fall by less than the amount of the tax. 
C)  The reduction in government revenue from the tax would be made up by an increase in property taxes. 
D)  The supply of the product would become more elastic. 
A)  The demand for the product would rise and the equilibrium price would fall by the amount of the tax. 
B)  The equilibrium price for the product would fall by less than the amount of the tax. 
C)  The reduction in government revenue from the tax would be made up by an increase in property taxes. 
D)  The supply of the product would become more elastic.

Question 17

'Sin taxes,' such as taxes on alcoholic beverages, are intended to

Accepted Answer

A)  increase the amount of the products supplied. 
B)  generate money to subsidise production of the products taxed. 
C)  reduce the quantity demanded. 
D)  generate funds to aid in the medical care of those harmed by the product. 
A)  increase the amount of the products supplied. 
B)  generate money to subsidise production of the products taxed. 
C)  reduce the quantity demanded. 
D)  generate funds to aid in the medical care of those harmed by the product.

Question 18

Income inequality increases as the Gini coefficient approaches 1.

Accepted Answer

A) True 
 B)False

Question 19

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

Accepted Answer

A)  is greater under the more elastic supply curve S0. 
B)  is greater under the less elastic supply curve S0. 
C)  is greater under the less elastic supply curve S1. 
D)  is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour. 
A)  is greater under the more elastic supply curve S0. 
B)  is greater under the less elastic supply curve S0. 
C)  is greater under the less elastic supply curve S1. 
D)  is the same under either supply curve because there is a single demand curve that captures buyers' market behaviour.

Question 20

Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case

Accepted Answer

A)  the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle. 
B)  the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle. 
C)  both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor. 
D)  neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor. 
A)  the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle. 
B)  the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle. 
C)  both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor. 
D)  neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.

Exemptions and deductions are used

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

-Refer to Figure 16-5. The middle 20 per cent of households

A tax bracket is

-Refer to Figure 16-5. The highest 20 per cent of households

-Refer to Figure 16-6. If area X = 2060, area Y = 240, and area Z = 2700, calculate the Gini coefficient for Islandia.

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

When considering changes in tax policy, economists usually focus on

If your income is $40 000 and you pay taxes of $4650, what is your average tax rate? Show your work.

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold,

As the value of the Gini coefficient approaches one,

The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the

How would the elimination of a sales tax affect the market for a product that had been subject to the tax?

'Sin taxes,' such as taxes on alcoholic beverages, are intended to

Income inequality increases as the Gini coefficient approaches 1.

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

Filters

Exam 16: The Distribution of Income and Social Policy

Exemptions and deductions are used

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

-Refer to Figure 16-5. The middle 20 per cent of households

A tax bracket is

-Refer to Figure 16-5. The highest 20 per cent of households

-Refer to Figure 16-6. If area X = 2060, area Y = 240, and area Z = 2700, calculate the Gini coefficient for Islandia.

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

When considering changes in tax policy, economists usually focus on

If your income is $40 000 and you pay taxes of $4650, what is your average tax rate? Show your work.

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold,

As the value of the Gini coefficient approaches one,

The idea that two taxpayers in the same economic circumstances should pay the same level of taxes is known as the

How would the elimination of a sales tax affect the market for a product that had been subject to the tax?

'Sin taxes,' such as taxes on alcoholic beverages, are intended to

Income inequality increases as the Gini coefficient approaches 1.

-Refer to Figure 16-2. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopoly Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

Filters