Question 1

In a proportional tax system each individual would pay the same percentage of his or her income in taxes.

Accepted Answer

A) True 
 B)False

Question 2

The process by which a legislator votes in favor of the legislation of other lawmakers in order to gain support for her own legislation is known as:

Accepted Answer

A) ​pork barrel legislation. 
B) ​logrolling. 
C) ​the median vote model. 
D) ​none of the above 
A) ​pork barrel legislation. 
B) ​logrolling. 
C) ​the median vote model. 
D) ​none of the above

Question 3

Which of the following accounts for the largest percentage of federal taxes?

Accepted Answer

A) ​gift taxes 
B) ​social security tax 
C) ​individual income taxes 
D) ​corporate income taxes 
A) ​gift taxes 
B) ​social security tax 
C) ​individual income taxes 
D) ​corporate income taxes

Question 4

Which of the following is an example of a progressive tax?

Accepted Answer

A) ​Social Security tax 
B) ​federal income tax 
C) ​excise tax 
D) ​payroll tax 
A) ​Social Security tax 
B) ​federal income tax 
C) ​excise tax 
D) ​payroll tax

Question 5

The motivation for an individual citizen to spend the necessary time and effort to resist an interest group is minimal, even if she had a guarantee that this resistance would be effective.

Accepted Answer

A) True 
 B)False

Question 6

Does the benefits received principle work well for all public goods?

Accepted Answer

The benefits received principle means th

Question 7

When you add payroll taxes and Medicare, the tax system becomes more progressive than when we solely consider the federal income tax.

Accepted Answer

A) True 
 B)False

Question 8

If Stephen earns $100,000 this year and pays $20,000 in taxes and Chris earns $50,000 this year and pays $5,000 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 9

The idea of rational ignorance implies that people are fully informed about their market purchases but uninformed about political issues.

Accepted Answer

A) True 
 B)False

Question 10

Vertical equity is the concept that people with different levels of income should be treated differently.

Accepted Answer

A) True 
 B)False

Question 11

Tax collected based on a taxpayer's spending is known as:

Accepted Answer

A) ​excise tax. 
B) ​consumption tax. 
C) ​gift tax. 
D) ​income tax. 
A) ​excise tax. 
B) ​consumption tax. 
C) ​gift tax. 
D) ​income tax.

Question 12

Which of the following statements best summarizes the essence of public choice analysis?

Accepted Answer

A) ​Public choice analysis applies economic principles to political science issues. 
B) ​Public choice analysis applies political science principles to traditionally economic issues. 
C) ​Public choice analysis assumes that government leaders are primarily motivated by what is best for the community, unlike private interest groups. 
D) ​none of the above 
A) ​Public choice analysis applies economic principles to political science issues. 
B) ​Public choice analysis applies political science principles to traditionally economic issues. 
C) ​Public choice analysis assumes that government leaders are primarily motivated by what is best for the community, unlike private interest groups. 
D) ​none of the above

Question 13

When decisions are made by majority rule, the individual consumption-payment link is broken.

Accepted Answer

A) True 
 B)False

Question 14

The benefits received principle means those with the least ability to pay should be the ones to receive the benefits.

Accepted Answer

A) True 
 B)False

Question 15

The median voter model predicts a strong tendency for both candidates to choose a position away from the middle of distribution.

Accepted Answer

A) True 
 B)False

Question 16

​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 $50,000 a year, your average tax rate would be:

Accepted Answer

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

Question 17

The view that those whose preferences represent the middle position on an issue will tend to determine the outcome of an election is called:

Accepted Answer

A) ​rent seeking. 
B) ​the median voter model. 
C) ​the special interest effect. 
D) ​the cyclical majority problem. 
A) ​rent seeking. 
B) ​the median voter model. 
C) ​the special interest effect. 
D) ​the cyclical majority problem.

Question 18

Most flat tax proposals call for exempting income to a certain minimum level.

Accepted Answer

A) True 
 B)False

Question 19

In recent years, more than one quarter of federal government spending went to Social Security and income security programs.

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. Above $25,000 in wages, the average tax rate:

Accepted Answer

A) ​would remain flat with an increase in income. 
B) ​would increase with an increase in income. 
C) ​would decrease with an increase in income. 
D) ​none of the above 
A) ​would remain flat with an increase in income. 
B) ​would increase with an increase in income. 
C) ​would decrease with an increase in income. 
D) ​none of the above

Exam 9: Public Finance and Public Choice

In a proportional tax system each individual would pay the same percentage of his or her income in taxes.

The process by which a legislator votes in favor of the legislation of other lawmakers in order to gain support for her own legislation is known as:

Which of the following accounts for the largest percentage of federal taxes?

Which of the following is an example of a progressive tax?

The motivation for an individual citizen to spend the necessary time and effort to resist an interest group is minimal, even if she had a guarantee that this resistance would be effective.

Does the benefits received principle work well for all public goods?

When you add payroll taxes and Medicare, the tax system becomes more progressive than when we solely consider the federal income tax.

If Stephen earns $100,000 this year and pays $20,000 in taxes and Chris earns $50,000 this year and pays $5,000 in taxes, this tax system would appear to be

The idea of rational ignorance implies that people are fully informed about their market purchases but uninformed about political issues.

Vertical equity is the concept that people with different levels of income should be treated differently.

Tax collected based on a taxpayer's spending is known as:

Which of the following statements best summarizes the essence of public choice analysis?

When decisions are made by majority rule, the individual consumption-payment link is broken.

The benefits received principle means those with the least ability to pay should be the ones to receive the benefits.

The median voter model predicts a strong tendency for both candidates to choose a position away from the middle of distribution.

​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 $50,000 a year, your average tax rate would be:

The view that those whose preferences represent the middle position on an issue will tend to determine the outcome of an election is called:

Most flat tax proposals call for exempting income to a certain minimum level.

In recent years, more than one quarter of federal government spending went to Social Security and income security programs.

​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. Above $25,000 in wages, the average tax rate:

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. If you were earning $50,000 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. Above $25,000 in wages, the average tax rate: