Question 1

Figure 12.5   Figure 12.5 shows the Lorenz curve for a hypothetical country.
-Refer to Figure 16.5.The highest 40 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 48 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 48 per cent of the society's total income. 
D)  earn 72 per cent of the society's total income.

Question 2

Figure 12.6   Figure 12.6 shows the Lorenz curves for Islandia and Syldavia.
-Refer to Figure 12.6.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 3

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

A Lorenz curve is a curve that shows the

Question 4

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

Accepted Answer

A)  the estimated amount of federal income tax firms withhold from their employees' paychecks. 
B)  the formula the federal government uses to determine the dollar amount of the personal exemption and the amounts taxpayers are allowed for deductions from their incomes. 
C)  used to determine the average tax rate. 
D)  the income range within which a tax rate applies. 
A)  the estimated amount of federal income tax firms withhold from their employees' paychecks. 
B)  the formula the federal government uses to determine the dollar amount of the personal exemption and the amounts taxpayers are allowed for deductions from their incomes. 
C)  used to determine the average tax rate. 
D)  the income range within which a tax rate applies.

Question 5

The corporate income tax is ultimately paid by all of the following except

Accepted Answer

A)  owners of the corporation. 
B)  the corporation's debtors in the form of lower rates of return on the corporation's bonds. 
C)  customers in the form of higher prices. 
D)  employees in the form of lower wages. 
A)  owners of the corporation. 
B)  the corporation's debtors in the form of lower rates of return on the corporation's bonds. 
C)  customers in the form of higher prices. 
D)  employees in the form of lower wages.

Question 6

If the marginal tax rate is equal to 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 7

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 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 8

Which of the methods below would avoid double taxation?

Accepted Answer

A)  A flat tax, as opposed to a progressive tax, is levied on corporate profits 
B)  A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains 
C)  A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits. The shareholder would then be required to include this amount as taxable income for her personal income tax. The corporation also pays tax on its corporate income 
D)  None of the above 
A)  A flat tax, as opposed to a progressive tax, is levied on corporate profits 
B)  A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains 
C)  A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits. The shareholder would then be required to include this amount as taxable income for her personal income tax. The corporation also pays tax on its corporate income 
D)  None of the above

Question 9

Figure 12.4  
-Refer to Figure 12.4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.

Accepted Answer

A)  Panel A, Panel B, Panel C 
B)  Panel B, Panel C, Panel A 
C)  Panel A, Panel C, Panel B 
D)  Panel C, Panel B, Panel A 
A)  Panel A, Panel B, Panel C 
B)  Panel B, Panel C, Panel A 
C)  Panel A, Panel C, Panel B 
D)  Panel C, Panel B, Panel A

Question 10

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 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 11

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

Why do economists argue that the corporate income tax is an example of a tax with a high deadweight loss?

Accepted Answer

A)  Because some of the burden of the tax is passed on to consumers in the form of higher prices 
B)  Because it encourages corporations to seek ways to evade taxes 
C)  Because taxing a corporation's income amounts to double taxing the earnings on individual shareholders' investments in corporations 
D)  Because it discourages corporations from undertaking capital investments to enhance market competitiveness 
A)  Because some of the burden of the tax is passed on to consumers in the form of higher prices 
B)  Because it encourages corporations to seek ways to evade taxes 
C)  Because taxing a corporation's income amounts to double taxing the earnings on individual shareholders' investments in corporations 
D)  Because it discourages corporations from undertaking capital investments to enhance market competitiveness

Question 14

Most economists agree that some of the burden of the corporate income tax

Accepted Answer

A)  is reduced because the tax is progressive. 
B)  is shared by the federal government. 
C)  is reduced because the tax is used to attain a social objective. 
D)  is passed on to consumers in the form of higher prices. 
A)  is reduced because the tax is progressive. 
B)  is shared by the federal government. 
C)  is reduced because the tax is used to attain a social objective. 
D)  is passed on to consumers in the form of higher prices.

Question 15

How does a proportional tax impact people with lower incomes?

Accepted Answer

A)  They pay a lower percentage of their incomes in tax than do people with higher incomes. 
B)  They pay a higher percentage of their incomes in tax than do people with higher incomes. 
C)  They pay the same percentage of their incomes in tax as do people with higher incomes. 
D)  They pay the same amount of taxes as people with higher incomes pay. 
A)  They pay a lower percentage of their incomes in tax than do people with higher incomes. 
B)  They pay a higher percentage of their incomes in tax than do people with higher incomes. 
C)  They pay the same percentage of their incomes in tax as do people with higher incomes. 
D)  They pay the same amount of taxes as people with higher incomes pay.

Question 16

How does a regressive tax impact people with lower incomes?

Accepted Answer

A)  They pay a higher percentage of their incomes in tax than do people with higher incomes. 
B)  They pay a lower percentage of their incomes in tax than do people with higher incomes. 
C)  They pay the same percentage of their incomes in tax as do people with higher incomes. 
D)  They do not have to pay unless their incomes exceed a certain amount. 
A)  They pay a higher percentage of their incomes in tax than do people with higher incomes. 
B)  They pay a lower percentage of their incomes in tax than do people with higher incomes. 
C)  They pay the same percentage of their incomes in tax as do people with higher incomes. 
D)  They do not have to pay unless their incomes exceed a certain amount.

Question 17

The federal government and some state governments levy taxes on specific goods such as petrol,cigarettes,and beer.These are known as -.

Accepted Answer

A)  sales taxes 
B)  sin taxes 
C)  specific taxes 
D)  excise taxes 
A)  sales taxes 
B)  sin taxes 
C)  specific taxes 
D)  excise taxes

Question 18

Figure 12.1  
-Refer to Figure 12.1.The sales tax revenue collected by the government 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 19

How are exemptions and deductions used?

Accepted Answer

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

Question 20

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 government's revenue from the tax is represented by the area

Accepted Answer

A)  (PaPc × Qa) if the supply curve is S0 and (PbPc × Qb) if the supply curve is S1. 
B)  (PaPd × Qa) if the supply curve is S0 and (PbPe × Qb) if the supply curve is S1. 
C)  (PaPe × Qa) under either supply curve. 
D)  (PbPe × Qb) under either supply curve. 
A)  (PaPc × Qa) if the supply curve is S0 and (PbPc × Qb) if the supply curve is S1. 
B)  (PaPd × Qa) if the supply curve is S0 and (PbPe × Qb) if the supply curve is S1. 
C)  (PaPe × Qa) under either supply curve. 
D)  (PbPe × Qb) under either supply curve.

Figure 12.5 Figure 12.5 shows the Lorenz curve for a hypothetical country. -Refer to Figure 16.5.The highest 40 per cent of households

Figure 12.6 Figure 12.6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 12.6.If area X = 2060,area Y = 240,and area Z = 2700,calculate the Gini coefficient for Islandia.

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

The corporate income tax is ultimately paid by all of the following except

If the marginal tax rate is equal to the average tax rate as taxable income increases,the tax structure is -.

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

Which of the methods below would avoid double taxation?

Figure 12.4 -Refer to Figure 12.4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.

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 producer's burden of the tax

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

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

Why do economists argue that the corporate income tax is an example of a tax with a high deadweight loss?

Most economists agree that some of the burden of the corporate income tax

How does a proportional tax impact people with lower incomes?

How does a regressive tax impact people with lower incomes?

The federal government and some state governments levy taxes on specific goods such as petrol,cigarettes,and beer.These are known as -.

Figure 12.1 -Refer to Figure 12.1.The sales tax revenue collected by the government is represented by the area -.

How are exemptions and deductions used?

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 government's revenue from the tax is represented by the area

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 16.5.The highest 40 per cent of households

Figure 12.6 Figure 12.6 shows the Lorenz curves for Islandia and Syldavia. -Refer to Figure 12.6.If area X = 2060,area Y = 240,and area Z = 2700,calculate the Gini coefficient for Islandia.

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

The corporate income tax is ultimately paid by all of the following except

If the marginal tax rate is equal to the average tax rate as taxable income increases,the tax structure is -.

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

Which of the methods below would avoid double taxation?

Figure 12.4 -Refer to Figure 12.4.Rank the above panels in terms of most unequal income distribution to least unequal income distribution.

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 producer's burden of the tax

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

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

Why do economists argue that the corporate income tax is an example of a tax with a high deadweight loss?

Most economists agree that some of the burden of the corporate income tax

How does a proportional tax impact people with lower incomes?

How does a regressive tax impact people with lower incomes?

The federal government and some state governments levy taxes on specific goods such as petrol,cigarettes,and beer.These are known as -.

Figure 12.1 -Refer to Figure 12.1.The sales tax revenue collected by the government is represented by the area -.

How are exemptions and deductions used?

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 government's revenue from the tax is represented by the area

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