Question 1

Figure 12.5   Figure 12.5 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 12.5.The middle 40 per cent of households

Accepted Answer

A)  earn 20 per cent of the society's total income. 
B)  earn 40 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 40 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 2

If the marginal tax rate is greater than the average tax rate as taxable income increases,the tax structure is -.

Accepted Answer

A)  regressive 
B)  proportional 
C)  progressive 
D)  unfair 
A)  regressive 
B)  proportional 
C)  progressive 
D)  unfair

Question 3

Figure 12.1  
-Refer to Figure 12.1.Area E + H represents

Accepted Answer

A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government. 
A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government.

Question 4

According to the horizontal-equity principle of taxation,

Accepted Answer

A)  individuals who receive the benefits of a good or service should bear a greater share of the tax burden. 
B)  individuals who are most able to pay should bear a greater share of the tax burden. 
C)  people in the same economic situation should be treated equally. 
D)  individuals who are willing to bear a greater share of the tax burden should be compensated with nonmonetary benefits. 
A)  individuals who receive the benefits of a good or service should bear a greater share of the tax burden. 
B)  individuals who are most able to pay should bear a greater share of the tax burden. 
C)  people in the same economic situation should be treated equally. 
D)  individuals who are willing to bear a greater share of the tax burden should be compensated with nonmonetary benefits.

Question 5

Figure 12.1  
-Refer to Figure 12.1.The excess burden of the tax is represented by the area -.

Accepted Answer

A)  B + C 
B)  F + G 
C)  E + H 
D)  B + C + F + G 
A)  B + C 
B)  F + G 
C)  E + H 
D)  B + C + F + G

Question 6

The term tax incidence refers to

Accepted Answer

A)  the degree of progression of a tax. 
B)  the actual division of the burden of a tax between buyers and sellers in a market. 
C)  the amount of revenue government collects from a tax imposed on a good or service. 
D)  whether the burden of a tax rests more heavily on those with higher incomes or those with lower incomes. 
A)  the degree of progression of a tax. 
B)  the actual division of the burden of a tax between buyers and sellers in a market. 
C)  the amount of revenue government collects from a tax imposed on a good or service. 
D)  whether the burden of a tax rests more heavily on those with higher incomes or those with lower incomes.

Question 7

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 8

How do economic growth rates affect a nation's standard of living?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The speed at which an economy grows dete

Question 9

Figure 12.2   Figure 12.2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 12.2.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 Pa - Pc under either supply curve. 
B)  is Pb - Pc under either supply curve. 
C)  is Pa - Pc if the supply curve is S0 and Pb - Pc if the supply curve is S1. 
D)  is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1. 
A)  is Pa - Pc under either supply curve. 
B)  is Pb - Pc under either supply curve. 
C)  is Pa - Pc if the supply curve is S0 and Pb - Pc if the supply curve is S1. 
D)  is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1.

Question 10

Income inequality increases as the Gini coefficient approaches 1.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements concerning the federal corporate income tax is true?

Accepted Answer

A)  It is an efficient tax because it imposes a small excess burden relative to the tax revenue it raises. 
B)  The incidence of the corporate income tax can be determined by using demand and supply analysis. 
C)  Determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax. 
D)  The corporate income tax is an example of the benefits-received principle. 
A)  It is an efficient tax because it imposes a small excess burden relative to the tax revenue it raises. 
B)  The incidence of the corporate income tax can be determined by using demand and supply analysis. 
C)  Determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax. 
D)  The corporate income tax is an example of the benefits-received principle.

Question 13

Figure 12.1  
-Refer to Figure 12.1.Area B + C represents

Accepted Answer

A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government. 
A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government.

Question 14

Figure 12.1  
-Refer to Figure 12.1.Area F + G represents

Accepted Answer

A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government. 
A)  the portion of sales tax revenue borne by consumers. 
B)  the portion of sales tax revenue borne by producers. 
C)  the excess burden of the sales tax. 
D)  sales tax revenue collected by the government.

Question 15

The Gini coefficient is measured by

Accepted Answer

A)  summing up the cumulative income percentages on the Lorenz curve. 
B)  summing up the total income earned by the population and dividing by the size of the population. 
C)  using the formula: area between perfect inequality and Lorenz curve ÷ area between the line of perfect equality and the Lorenz curve. 
D)  using the formula: area between the line of perfect equality and the Lorenz curve ÷ the area under the line of perfect equality. 
A)  summing up the cumulative income percentages on the Lorenz curve. 
B)  summing up the total income earned by the population and dividing by the size of the population. 
C)  using the formula: area between perfect inequality and Lorenz curve ÷ area between the line of perfect equality and the Lorenz curve. 
D)  using the formula: area between the line of perfect equality and the Lorenz curve ÷ the area under the line of perfect equality.

Question 16

If the percentage of your taxable income that you pay in taxes is constant,then your tax is -.

Accepted Answer

A)  random 
B)  regressive 
C)  progressive 
D)  proportional 
A)  random 
B)  regressive 
C)  progressive 
D)  proportional

Question 17

The government of Coppersmith raises revenue through a general income tax paid by all its residents to operate the city's golf course.The golf course is used by private members.This method of raising revenue to operate the golf course is

Accepted Answer

A)  consistent with the benefits-received principle. 
B)  consistent with the ability-to-pay principle. 
C)  inconsistent with the benefits-received principle. 
D)  inconsistent with the ability-to-pay principle. 
A)  consistent with the benefits-received principle. 
B)  consistent with the ability-to-pay principle. 
C)  inconsistent with the benefits-received principle. 
D)  inconsistent with the ability-to-pay principle.

Question 18

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

Accepted Answer

A)  Consumers pay the entire tax on the product. 
B)  Firms pay the majority of the tax on the product. 
C)  Firms pay the entire tax on the product. 
D)  Consumers pay the majority of the tax on the product. 
A)  Consumers pay the entire tax on the product. 
B)  Firms pay the majority of the tax on the product. 
C)  Firms pay the entire tax on the product. 
D)  Consumers pay the majority of the tax on the product.

Question 19

What is the tax structure of the federal corporate income tax?

Accepted Answer

A)  Progressive 
B)  Proportional 
C)  Regressive 
D)  Unfair 
A)  Progressive 
B)  Proportional 
C)  Regressive 
D)  Unfair

Question 20

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

Accepted Answer

A)  A regressive tax system 
B)  A proportional tax system 
C)  A progressive tax system 
D)  A consumption tax system 
A)  A regressive tax system 
B)  A proportional tax system 
C)  A progressive tax system 
D)  A consumption tax system

Figure 12.5 Figure 12.5 shows the Lorenz curve for a hypothetical country. -Refer to Figure 12.5.The middle 40 per cent of households

If the marginal tax rate is greater than the average tax rate as taxable income increases,the tax structure is -.

Figure 12.1 -Refer to Figure 12.1.Area E + H represents

According to the horizontal-equity principle of taxation,

Figure 12.1 -Refer to Figure 12.1.The excess burden of the tax is represented by the area -.

The term tax incidence refers to

A tax bracket is

How do economic growth rates affect a nation's standard of living? _ _

Figure 12.2 Figure 12.2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 12.2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Income inequality increases as the Gini coefficient approaches 1.

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

Which of the following statements concerning the federal corporate income tax is true?

Figure 12.1 -Refer to Figure 12.1.Area B + C represents

Figure 12.1 -Refer to Figure 12.1.Area F + G represents

The Gini coefficient is measured by

If the percentage of your taxable income that you pay in taxes is constant,then your tax is -.

The government of Coppersmith raises revenue through a general income tax paid by all its residents to operate the city's golf course.The golf course is used by private members.This method of raising revenue to operate the golf course is

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

What is the tax structure of the federal corporate income tax?

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

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

Exam 12: Social Policy and Inequality

Figure 12.5 Figure 12.5 shows the Lorenz curve for a hypothetical country. -Refer to Figure 12.5.The middle 40 per cent of households

If the marginal tax rate is greater than the average tax rate as taxable income increases,the tax structure is -.

Figure 12.1 -Refer to Figure 12.1.Area E + H represents

According to the horizontal-equity principle of taxation,

Figure 12.1 -Refer to Figure 12.1.The excess burden of the tax is represented by the area -.

The term tax incidence refers to

A tax bracket is

How do economic growth rates affect a nation's standard of living? _____________________________________________________________________________________________ _____________________________________________________________________________________________

Figure 12.2 Figure 12.2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 12.2.If the government imposes an excise tax of $1.00 on every unit sold,the consumer's burden of the tax

Income inequality increases as the Gini coefficient approaches 1.

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

Which of the following statements concerning the federal corporate income tax is true?

Figure 12.1 -Refer to Figure 12.1.Area B + C represents

Figure 12.1 -Refer to Figure 12.1.Area F + G represents

The Gini coefficient is measured by

If the percentage of your taxable income that you pay in taxes is constant,then your tax is -.

The government of Coppersmith raises revenue through a general income tax paid by all its residents to operate the city's golf course.The golf course is used by private members.This method of raising revenue to operate the golf course is

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

What is the tax structure of the federal corporate income tax?

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

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency,government Price Setting and Taxes

Technology,production and Costs

Firms in Perfectly Competitive Markets

Monopoly Markets

Monopolistic Competition and Oligopoly

The Markets for Labour and Other Factors of Production

Government Intervention in the Market

Gdp: Measuring Total Production, income and Economic Growth

Unemployment and Inflation

Aggregate Demand and Aggregate Supply Analysis

Money,banks and the Reserve Bank of Australia

Monetary Policy

Fiscal Policy

Comparative Advantage and the Gains From International Trade

Macroeconomics in an Open Economy

Filters

How do economic growth rates affect a nation's standard of living? _ _