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

When the majority of voters have preferences very different from those of the median voter,then the median voter theorem will lead to accurate predictions of the outcomes of elections.

Exemptions and deductions are used

When members of Congress vote to pass new legislation,they will

Figure 18-1 -Refer to Figure 18-1.Of the tax revenue collected by the government,the portion borne by consumers is represented by the area

Horizontal equity is achieved when taxes are collected from those who benefit from the government expenditure of the tax revenue.

One result of the public choice model is that most economists believe that

Which of the following statements about rent seeking is false?

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 18-2.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

Congressman Flack votes for a program that will benefit the constituents of Congressman Walpole.The public choice model suggests that Flack's vote is best explained by which of the following?

Figure 18-1 -Refer to Figure 18-1.The excess burden of the tax is represented by the area

According to public choice theory,policymakers

Economists argue that the corporate income tax is an example of a tax with a high deadweight loss because

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

Table 18-11 Table 18-11 shows income distribution data for two countries. Use this data to answer the following questions. -Refer to Table 18-11. 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.

According to the benefits-received principle,those who receive the benefits from a government program should pay the taxes that support the program.

Which of the following statements is true?

Table 18-2 -Refer to Table 18-2.The table above lists three policy alternatives that the U.S.Senate will vote on,along with the ranking of these alternates.The Senate must decide which of these alternatives should receive an additional $1 billion of funding,and there is enough money in the federal budget for only one of these alternatives.If a series of votes is taken in which each pair of alternatives is considered (homeland security and education; homeland security and medical research; education and medical research)which of the following will result from these votes?

A tax bracket is

The term tax incidence refers to

Suppose the government wants to finance housing for low-income families by placing a tax on the purchase of luxury homes.Assume the government defines a luxury home as a home that is purchased for at least $1 million.This tax is consistent with the