Question 1

The administrative burden of taxation relates to the

Accepted Answer

A) ​the disincentive for individuals and businesses to work generate income. 
B) ​individuals' cost of preparing tax returns and the government's cost of enforcing tax laws. 
C) ​the opportunity cost of social programs. 
D) ​the net interest that must be paid on the national debt. 
A) ​the disincentive for individuals and businesses to work generate income. 
B) ​individuals' cost of preparing tax returns and the government's cost of enforcing tax laws. 
C) ​the opportunity cost of social programs. 
D) ​the net interest that must be paid on the national debt.

Question 2

​Exhibit 9-1
A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%.
-Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $20,000 a year?

Accepted Answer

A) ​$2,400 
B) ​$1,200 
C) ​$3,000 
D) ​zero 
A) ​$2,400 
B) ​$1,200 
C) ​$3,000 
D) ​zero

Question 3

A flat tax:

Accepted Answer

A) ​is designed so that everybody would pay the same number of dollars in taxes. 
B) ​is designed in such a way that as a person's income rises, the tax rate falls. 
C) ​is designed so that everybody would be charged the same percentage of their income. 
D) ​is designed to take a smaller percentage of higher incomes as compared to lower incomes. 
A) ​is designed so that everybody would pay the same number of dollars in taxes. 
B) ​is designed in such a way that as a person's income rises, the tax rate falls. 
C) ​is designed so that everybody would be charged the same percentage of their income. 
D) ​is designed to take a smaller percentage of higher incomes as compared to lower incomes.

Question 4

The self-interest assumption is central to the analysis of behavior in both private and public sectors.

Accepted Answer

A) True 
 B)False

Question 5

Voters will gather information on voting alternatives:

Accepted Answer

A) ​when the cost of acquiring such information is exorbitantly high. 
B) ​as long as the marginal benefit to them of acquiring additional information exceeds the marginal cost to them. 
C) ​as long as the marginal benefit to them of the information is less than the marginal cost to them of gathering the information. 
D) ​because the welfare of the community is always perceived to be more important than the welfare of the individual. 
A) ​when the cost of acquiring such information is exorbitantly high. 
B) ​as long as the marginal benefit to them of acquiring additional information exceeds the marginal cost to them. 
C) ​as long as the marginal benefit to them of the information is less than the marginal cost to them of gathering the information. 
D) ​because the welfare of the community is always perceived to be more important than the welfare of the individual.

Question 6

Public choice theory assumes that each voter will tend to favor the political candidate who offers:

Accepted Answer

A) ​programs with the largest social benefits. 
B) ​equality of government-provided benefits across all citizens. 
C) ​programs that will yield the greatest personal benefits net of personal cost. 
D) ​a plan requiring the least amount of tax dollars, regardless of the level of benefits provided. 
A) ​programs with the largest social benefits. 
B) ​equality of government-provided benefits across all citizens. 
C) ​programs that will yield the greatest personal benefits net of personal cost. 
D) ​a plan requiring the least amount of tax dollars, regardless of the level of benefits provided.

Question 7

Which of the following is generally considered the most regressive type of tax?

Accepted Answer

A) ​gift tax 
B) ​federal income tax 
C) ​excise tax 
D) ​payroll tax 
A) ​gift tax 
B) ​federal income tax 
C) ​excise tax 
D) ​payroll tax

Question 8

The benefits received principle suggests that:

Accepted Answer

A) ​traditional exemptions should be removed since they benefit people with ability to pay more taxes. 
B) ​people with different levels of income should be treated in the same manner. 
C) ​individuals receiving the benefits should be those who pay for them. 
D) ​those with the greatest ability to pay taxes should pay more than those with the least ability to pay taxes. 
A) ​traditional exemptions should be removed since they benefit people with ability to pay more taxes. 
B) ​people with different levels of income should be treated in the same manner. 
C) ​individuals receiving the benefits should be those who pay for them. 
D) ​those with the greatest ability to pay taxes should pay more than those with the least ability to pay taxes.

Question 9

Which of the following accounted for the highest percentage of federal government spending in 2013?

Accepted Answer

A) ​net interest on the national debt 
B) ​income security 
C) ​national defense 
D) ​education and health 
A) ​net interest on the national debt 
B) ​income security 
C) ​national defense 
D) ​education and health

Question 10

A regressive tax:

Accepted Answer

A) ​is designed to take a larger percentage of higher incomes as compared to lower incomes. 
B) ​is designed in such a way that as a person's income rises, the amount of tax as a proportion of income rises. 
C) ​takes a greater proportion of the income of lower-income groups than of higher-income groups. 
D) ​is considered to be the most equitable type of tax. 
A) ​is designed to take a larger percentage of higher incomes as compared to lower incomes. 
B) ​is designed in such a way that as a person's income rises, the amount of tax as a proportion of income rises. 
C) ​takes a greater proportion of the income of lower-income groups than of higher-income groups. 
D) ​is considered to be the most equitable type of tax.

Question 11

Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?

Accepted Answer

A tax on prescriptions drugs would most

Question 12

Why might voters tend to be relatively uninformed about political issues?

Accepted Answer

Individuals act in their own self-intere

Question 13

​Exhibit 9-1
A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%.
-Refer to Exhibit 9-1. If you were earning $100,000 a year, your average tax rate would be:

Accepted Answer

A) ​15 percent. 
B) ​12 percent. 
C) ​9 percent. 
D) ​6 percent. 
A) ​15 percent. 
B) ​12 percent. 
C) ​9 percent. 
D) ​6 percent.

Question 14

The benefits received principle would not work well in which of the following cases?

Accepted Answer

A) ​gasoline tax 
B) ​national defense 
C) ​taxing those people who use a private good 
D) ​admission fees to a national park 
A) ​gasoline tax 
B) ​national defense 
C) ​taxing those people who use a private good 
D) ​admission fees to a national park

Question 15

If a flat tax plan allowed individuals to deduct a standard allowance of $20,000 and the flat tax rate was 20 percent, an individual earning $100,000 would pay an average tax rate of 20%.

Accepted Answer

A) True 
 B)False

Question 16

The median voter model implies that:

Accepted Answer

A) ​most voters will have about the same preferences for goods and services provided through government. 
B) ​a candidate may adopt more extreme views when seeking her party's nomination than during the general election. 
C) ​political voting will be as economically efficient as voting with dollars in competitive markets. 
D) ​none of the above 
A) ​most voters will have about the same preferences for goods and services provided through government. 
B) ​a candidate may adopt more extreme views when seeking her party's nomination than during the general election. 
C) ​political voting will be as economically efficient as voting with dollars in competitive markets. 
D) ​none of the above

Question 17

If Mike earns $80,000 this year and pays $16,000 in taxes and David earns $50,000 this year and pays $11,000 in taxes, this tax system would appear to be

Accepted Answer

A) ​progressive. 
B) ​proportional. 
C) ​regressive. 
D) ​none of the above 
A) ​progressive. 
B) ​proportional. 
C) ​regressive. 
D) ​none of the above

Question 18

A special interest issue is one that:

Accepted Answer

A) ​provides large private benefits and large social benefits. 
B) ​provides small private benefits and large social benefits. 
C) ​provides large benefits to each of a small number of people and small costs to each of a large number of people. 
D) ​provides small benefits to each of a small number of people and large costs to each of a large number of people. 
A) ​provides large private benefits and large social benefits. 
B) ​provides small private benefits and large social benefits. 
C) ​provides large benefits to each of a small number of people and small costs to each of a large number of people. 
D) ​provides small benefits to each of a small number of people and large costs to each of a large number of people.

Question 19

If a flat tax plan allowed individuals to deduct a standard allowance of $15,000 and the flat tax rate was 10 percent, an individual earning $12,000 a year would not pay any income taxes.

Accepted Answer

A) True 
 B)False

Question 20

​Exhibit 9-1
A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%.
-Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $50,000 a year?

Accepted Answer

A) ​zero 
B) ​$1,200 
C) ​$3,000 
D) ​$6,000 
A) ​zero 
B) ​$1,200 
C) ​$3,000 
D) ​$6,000

Exam 9: Public Finance and Public Choice

The administrative burden of taxation relates to the

​Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $20,000 a year?

A flat tax:

The self-interest assumption is central to the analysis of behavior in both private and public sectors.

Voters will gather information on voting alternatives:

Public choice theory assumes that each voter will tend to favor the political candidate who offers:

Which of the following is generally considered the most regressive type of tax?

The benefits received principle suggests that:

Which of the following accounted for the highest percentage of federal government spending in 2013?

A regressive tax:

Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?

Why might voters tend to be relatively uninformed about political issues?

​Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. If you were earning $100,000 a year, your average tax rate would be:

The benefits received principle would not work well in which of the following cases?

If a flat tax plan allowed individuals to deduct a standard allowance of $20,000 and the flat tax rate was 20 percent, an individual earning $100,000 would pay an average tax rate of 20%.

The median voter model implies that:

If Mike earns $80,000 this year and pays $16,000 in taxes and David earns $50,000 this year and pays $11,000 in taxes, this tax system would appear to be

A special interest issue is one that:

If a flat tax plan allowed individuals to deduct a standard allowance of $15,000 and the flat tax rate was 10 percent, an individual earning $12,000 a year would not pay any income taxes.

​Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $50,000 a year?

The Role and Method of Economics

Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Market in Motion and Price Controls

Elasticities

Market Efficiency and Welfare

Market Failure

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Filters

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $20,000 a year?

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. If you were earning $100,000 a year, your average tax rate would be:

Exhibit 9-1 A flat tax plan allows individuals to deduct a standard allowance of $25,000 from their wages. Assume that the flat tax rate is 12%. -Refer to Exhibit 9-1. How much income tax would you have to pay if you were earning $50,000 a year?