Question 1

The principle feature of private goods is that

Accepted Answer

A) they cannot be rented or purchased. 
B) consumption by one person reduces the quantity available to others. 
C) externalities associated with their production are always negative. 
D) no one can be excluded from consumption of the product. 
A) they cannot be rented or purchased. 
B) consumption by one person reduces the quantity available to others. 
C) externalities associated with their production are always negative. 
D) no one can be excluded from consumption of the product. B

Question 2

Demerit goods are often

Accepted Answer

A) produced by the government. 
B) subsidized. 
C) heavily taxed. 
D) advertised. 
A) produced by the government. 
B) subsidized. 
C) heavily taxed. 
D) advertised. C

Question 3

A tax system characterized by a constant marginal tax rate is a

Accepted Answer

A) progressive tax system. 
B) proportional tax system. 
C) regressive tax system. 
D) fair tax system. 
A) progressive tax system. 
B) proportional tax system. 
C) regressive tax system. 
D) fair tax system. B

Question 4

Identify the economic and political functions of government and describe their purposes.

Accepted Answer

Economic functions:providing a legal sys

Question 5

Rational ignorance refers to the idea that

Accepted Answer

A) decision-makers do not understand what it means to be rational. 
B) information is costly,so decision-makers normally will act less than perfect information. 
C) bureaucrats take advantage of voter ignorance. 
D) dollar votes and political votes will lead to different outcomes. 
A) decision-makers do not understand what it means to be rational. 
B) information is costly,so decision-makers normally will act less than perfect information. 
C) bureaucrats take advantage of voter ignorance. 
D) dollar votes and political votes will lead to different outcomes.

Question 6

Rational ignorance is relevant for decision-making

Accepted Answer

A) only in private markets 
B) in both the public and private sectors. 
C) only for pubic choice. 
D) only for public goods. 
A) only in private markets 
B) in both the public and private sectors. 
C) only for pubic choice. 
D) only for public goods.

Question 7

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $5,500 in taxes.The tax system is ________.

Accepted Answer

The answer of A family making $30,000 pays $4,500 in...

Question 8

A flat tax with an exemption for the first $20,000 of family income and a constant tax rate would be

Accepted Answer

A) a proportional tax. 
B) a regressive tax. 
C) a progressive at low incomes and regressive at high incomes. 
D) a progressive tax. 
A) a proportional tax. 
B) a regressive tax. 
C) a progressive at low incomes and regressive at high incomes. 
D) a progressive tax.

Question 9

A consumer who buys a product without having compared prices at nearby stores

Accepted Answer

A) violates the assumption of rationality underlying consumer theory. 
B) is irrational because she could save money by shopping around. 
C) is rational because it would be costly to find out how much the product would cost elsewhere. 
D) is rationally ignorant if she expects the costs of doing so to be greater than possible savings. 
A) violates the assumption of rationality underlying consumer theory. 
B) is irrational because she could save money by shopping around. 
C) is rational because it would be costly to find out how much the product would cost elsewhere. 
D) is rationally ignorant if she expects the costs of doing so to be greater than possible savings.

Question 10

The distribution of tax burdens among various groups in society is referred to as

Accepted Answer

A) zero-base budgeting. 
B) sectioning. 
C) regressive placement. 
D) tax incidence. 
A) zero-base budgeting. 
B) sectioning. 
C) regressive placement. 
D) tax incidence.

Question 11

The free-rider problem is

Accepted Answer

A) the use of the public goods provided by a state by residents of another state. 
B) the incentive people have to avoid paying for a public good. 
C) the incentive people have once they are receiving welfare to keep getting welfare. 
D) that people cannot be forced to accept public goods. 
A) the use of the public goods provided by a state by residents of another state. 
B) the incentive people have to avoid paying for a public good. 
C) the incentive people have once they are receiving welfare to keep getting welfare. 
D) that people cannot be forced to accept public goods.

Question 12

Some economists argue for a ________ tax instead of the personal income tax because it would encourage more saving.

Accepted Answer

A) consumption 
B) capital gains 
C) corporate income 
D) property 
A) consumption 
B) capital gains 
C) corporate income 
D) property

Question 13

A proportional income tax structure implies that

Accepted Answer

A) marginal tax rates are the same regardless of the level of income. 
B) marginal tax rates increase as the level of income increases. 
C) everyone pays the same dollar amount in taxes. 
D) marginal tax rates decline as the level of income declines. 
A) marginal tax rates are the same regardless of the level of income. 
B) marginal tax rates increase as the level of income increases. 
C) everyone pays the same dollar amount in taxes. 
D) marginal tax rates decline as the level of income declines.

Question 14

The free-rider problem is encountered when

Accepted Answer

A) all individuals are willing to pay for what they consume. 
B) someone benefits from the consumption of a good without paying his or her full share. 
C) all individuals who consume a public good pay for it. 
D) all goods consumed and produced are private goods. 
A) all individuals are willing to pay for what they consume. 
B) someone benefits from the consumption of a good without paying his or her full share. 
C) all individuals who consume a public good pay for it. 
D) all goods consumed and produced are private goods.

Question 15

Suppose the income tax rate is zero on the first $10,000;10% on the next $20,000;20% on the next $20,000;30% on the next $20,000;and 40% on all income above $70,000.Family A has income of $100,000 while Family B has income of $40,000.The marginal tax rate for A will be ________% and for B will be ________%.

Accepted Answer

The answer of Suppose the income tax rate is zero...

Question 16

Government goods are

Accepted Answer

A) merit goods supplied by government. 
B) public goods supplied by government. 
C) private goods supplied by government. 
D) government-supplied goods,whether public or private. 
A) merit goods supplied by government. 
B) public goods supplied by government. 
C) private goods supplied by government. 
D) government-supplied goods,whether public or private.

Question 17

Provincial sales taxes are

Accepted Answer

A) progressive because higher income earners pay more tax. 
B) regressive because they tax consumption at the same rate for both rich and poor. 
C) regressive because higher income families don't pay as much tax as lower income families. 
D) proportional because everyone is charged the same percentage tax rate. 
A) progressive because higher income earners pay more tax. 
B) regressive because they tax consumption at the same rate for both rich and poor. 
C) regressive because higher income families don't pay as much tax as lower income families. 
D) proportional because everyone is charged the same percentage tax rate.

Question 18

An example of a regressive tax is the

Accepted Answer

A) personal income tax. 
B) inheritance tax. 
C) corporate income tax. 
D) goods and services tax. 
A) personal income tax. 
B) inheritance tax. 
C) corporate income tax. 
D) goods and services tax.

Question 19

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $6,500 in taxes.The tax system is ________.

Accepted Answer

The answer of A family making $30,000 pays $4,500 in...

Question 20

A consumption tax would

Accepted Answer

A) discourage saving because individuals would only pay taxes on income they spend. 
B) be progressive because everyone would be subject to the same tax system. 
C) be proportional because everyone would be subject to the same tax system. 
D) be progressive or regressive depending on the structure of the tax system. 
A) discourage saving because individuals would only pay taxes on income they spend. 
B) be progressive because everyone would be subject to the same tax system. 
C) be proportional because everyone would be subject to the same tax system. 
D) be progressive or regressive depending on the structure of the tax system.

The principle feature of private goods is that

Demerit goods are often

A tax system characterized by a constant marginal tax rate is a

Identify the economic and political functions of government and describe their purposes.

Rational ignorance refers to the idea that

Rational ignorance is relevant for decision-making

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $5,500 in taxes.The tax system is ________.

A flat tax with an exemption for the first $20,000 of family income and a constant tax rate would be

A consumer who buys a product without having compared prices at nearby stores

The distribution of tax burdens among various groups in society is referred to as

The free-rider problem is

Some economists argue for a ________ tax instead of the personal income tax because it would encourage more saving.

A proportional income tax structure implies that

The free-rider problem is encountered when

Suppose the income tax rate is zero on the first $10,000;10% on the next $20,000;20% on the next $20,000;30% on the next $20,000;and 40% on all income above $70,000.Family A has income of $100,000 while Family B has income of $40,000.The marginal tax rate for A will be % and for B will be %.

Government goods are

Provincial sales taxes are

An example of a regressive tax is the

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $6,500 in taxes.The tax system is ________.

A consumption tax would

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 10: The Public Sector

The principle feature of private goods is that

Demerit goods are often

A tax system characterized by a constant marginal tax rate is a

Identify the economic and political functions of government and describe their purposes.

Rational ignorance refers to the idea that

Rational ignorance is relevant for decision-making

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $5,500 in taxes.The tax system is ________.

A flat tax with an exemption for the first $20,000 of family income and a constant tax rate would be

A consumer who buys a product without having compared prices at nearby stores

The distribution of tax burdens among various groups in society is referred to as

The free-rider problem is

Some economists argue for a ________ tax instead of the personal income tax because it would encourage more saving.

A proportional income tax structure implies that

The free-rider problem is encountered when

Government goods are

Provincial sales taxes are

An example of a regressive tax is the

A family making $30,000 pays $4,500 in taxes and a family making $40,000 pays $6,500 in taxes.The tax system is ________.

A consumption tax would

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Measuring the Economys Performance

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters