Exam 18: Public Choice, taxes, and the Distribution of Income

There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax.Which of the following would have the most impact on who bears the burden of an excise tax?

When considering changes in tax policy,economists usually focus on

Sheldon Cleaver commented on the difficulty people have in overcoming poverty in the United States: "Most people whose incomes fall below the poverty line have difficulty pulling themselves above the line in future years.In this sense,poverty becomes a vicious cycle.I believe the psychological damage households face when they are branded with the 'poverty' label in our society is a major factor in their remaining in poverty.Despair is a major reason why the percentage of people with incomes that lie below the poverty line never falls below 10 percent." Which of the following correctly evaluates Cleaver's statement?

The political process is more likely to serve the interests of individuals whose preferences are in the middle,rather than individuals with preferences that are much to the left or right of the political center.This statement is best explained by which of the following?

A Lorenz curve summarizes the information provided by a Gini coefficient.

The term "payroll taxes" is often used to refer to

The excess burden of a tax

A tax on interest earned from saving is an example of a tax with a high deadweight loss because

What is the difference between the poverty line and the poverty rate?

A government-imposed tax on soft drinks would shift the supply curve for soft drinks to the left,________ the equilibrium price and ________ the equilibrium quantity.

In the United States,the federal income tax is an example of a

Figure 18-4 -Refer to Figure 18-4 to answer the following questions. a.Did the distribution of income become more equal in 2012 than it was in 2011,or did it become less equal? Explain. b.If area A = 1,900,area B = 450,and area C = 2,650,calculate the Gini coefficient for 2011 and the Gini coefficient for 2012.

The Arrow impossibility theorem

Table 18-5 Table 18-5 shows the amount of taxes paid on various levels of income. -Refer to Table 18-5.The tax system is

The average tax rate is calculated as

Table 18-7 Table 18-7 shows income distribution data for two countries.Use this data to answer the following questions. -Refer to Table 18-7. a.Draw a Lorenz curve for each country. b.Which country has the more equal distribution of income? c.Based on the Lorenz curve for the two countries,can you determine which country has the more progressive tax system? Explain your answer.

Table 18-4 Table 18-4 shows the amount of taxes paid on various levels of income. -Refer to Table 18-4.The tax system is

As a group,people with high incomes are likely to have

Between 1970 and 2006,the poverty rate in East Asia declined dramatically from 58.8 percent to 1.7 percent,while the poverty rate in Sub-Saharan Africa decreased from 39.9 percent to only 31.8 percent.The main reason for this is that

When the demand for a product is less elastic than the supply,consumers pay the majority of the tax on the product.