Exam 16: The Distribution of Income and Social Policy

What is the difference between a marginal tax rate and an average tax rate? Which is more important in determining the impact of the tax system on economic behaviour?

Which of the following tax systems would help reduce income inequality the most?

-Refer to Figure 16-1. Area B + C + F + G represents

A proportional tax is a tax for which people with lower incomes

If you pay $2000 in taxes on an income of $20 000, and a tax of $2700 on an income of $30 000, then over this range of income the tax is

According to the horizontal-equity principle of taxation,

If, as your taxable income decreases, you pay a larger percentage of your taxable income in taxes, then the tax is

If you pay $2000 in taxes on an income of $20 000, and a tax of $3000 on an income of $30 000, then over this range of income the tax is

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

In reference to the federal income tax system, a tax bracket is

For a given supply curve, the deadweight loss from the imposition of a tax is smaller if demand is more elastic.

Describe the main factors economists believe cause inequality of income.

If you pay a constant percentage of your taxable income in taxes, the tax is

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

When the demand for a product is more elastic than the supply,

What is a Lorenz curve and what is a Gini coefficient?

According to the benefits-received principle of taxation,

A marginal tax rate is

If, as your taxable income decreases, you pay a smaller percentage of your taxable income in taxes, then the tax is

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