Question 1

In a general equilibrium model,a tax on a single factor in its use only in a particular sector can affect returns to all factors in all sectors.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain A

Question 2

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain A

Question 3

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,π = $58522.5 
B)X* = 152.8,P* = $466.4,π = $58,369.6,Tax Rev.= $152.8 
C)X* = 152.8,P* = $465.4,π = $58,369.6,Tax Rev.= $152.8 
D)The tax revenue generated is the same,whether it is levied on the buyers or sellers.

Question 4

The tax-induced difference between the price paid by consumers and the price received by producers is

Accepted Answer

A)  the tax difference. 
B)  the tax wedge. 
C)  the statutory incidence. 
D)  the supply side effect. 
A)  the tax difference. 
B)  the tax wedge. 
C)  the statutory incidence. 
D)  the supply side effect.

Question 5

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 these. 
E)  none of these answer options are correct. 
A)  examining markets without specific information. 
B)  finding equilibrium from general information. 
C)  pricing goods at their shadow price. 
D)  all of these. 
E)  none of these answer options are correct.

Question 6

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 these answer options are correct. 
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 these answer options are correct.

Question 7

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

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 8

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

Accepted Answer

The economic inciden

Question 9

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.

Question 10

An industry where the capital-labor ratio is relatively high is characterized as

Accepted Answer

A)  capital intensive. 
B)  labor intensive. 
C)  income intensive. 
D)  market intensive. 
A)  capital intensive. 
B)  labor intensive. 
C)  income intensive. 
D)  market intensive.

Question 11

A tax wedge causes

Accepted Answer

A)  consumer prices to equal producer prices. 
B)  producer prices to rise above consumer prices. 
C)  consumer prices to separate from producer prices. 
D)  all prices to fall. 
A)  consumer prices to equal producer prices. 
B)  producer prices to rise above consumer prices. 
C)  consumer prices to separate from producer prices. 
D)  all prices to fall.

Question 12

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 13

Marginal and average taxes are

Accepted Answer

A)  calculated using the same methodology. 
B)  not used in modern tax analysis. 
C)  not calculated using the same methodology. 
D)  all of these answer options are correct. 
A)  calculated using the same methodology. 
B)  not used in modern tax analysis. 
C)  not calculated using the same methodology. 
D)  all of these answer options are correct.

Question 14

Marginal tax rates supply reliable measures of tax progressiveness.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 15

After a price change,the substitution effect will be the same as the income effect.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

Question 16

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

Question 17

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 18

The economic incidence of a unit tax is

Accepted Answer

A)  generally borne by the buyers. 
B)  generally borne by sellers. 
C)  generally borne by the government. 
D)  independent of the statutory incidence for the tax. 
A)  generally borne by the buyers. 
B)  generally borne by sellers. 
C)  generally borne by the government. 
D)  independent of the statutory incidence for the tax.

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 lump sum tax is one for which the individual's liability does not depend on behavior.

Accepted Answer

A)  True 
B)  False 
C)  Uncertain 
A)  True 
B)  False 
C)  Uncertain

In a general equilibrium model,a tax on a single factor in its use only in a particular sector can affect returns to all factors in all sectors.

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

The tax-induced difference between the price paid by consumers and the price received by producers is

General equilibrium refers to

When marginal tax rates are constant,

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

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

Statutory incidence of a tax deals with

An industry where the capital-labor ratio is relatively high is characterized as

A tax wedge causes

A tax on suppliers will cause the supply curve to shift

Marginal and average taxes are

Marginal tax rates supply reliable measures of tax progressiveness.

After a price change,the substitution effect will be the same as the income effect.

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

The economic incidence of a unit tax is

An oligopoly has ______ sellers in the market.

A lump sum tax is one for which the individual's liability does not depend on behavior.

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

In a general equilibrium model,a tax on a single factor in its use only in a particular sector can affect returns to all factors in all sectors.

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

The tax-induced difference between the price paid by consumers and the price received by producers is

General equilibrium refers to

When marginal tax rates are constant,

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

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

Statutory incidence of a tax deals with

An industry where the capital-labor ratio is relatively high is characterized as

A tax wedge causes

A tax on suppliers will cause the supply curve to shift

Marginal and average taxes are

Marginal tax rates supply reliable measures of tax progressiveness.

After a price change,the substitution effect will be the same as the income effect.

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

The economic incidence of a unit tax is

An oligopoly has ______ sellers in the market.

A lump sum tax is one for which the individual's liability does not depend on behavior.

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