Exam 12: The Design of the Tax System

Scenario 12-3 Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice,$9 for his second slice, and $5 for his third slice. The current market price is $5 per slice. -Refer to Scenario 12-3. How much consumer surplus does Regina receive from consuming her slice of cheesecake?

Scenario 12-1 Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. -Refer to Scenario 12-1. How much total consumer surplus do Ken and Mark get when each purchases one cigar?

Briefly describe the tradeoff between equity and efficiency of tax systems using a few examples.

Tax incidence refers to

An advantage of a consumption tax over the present tax system is that a consumption tax

A family's income tax liability is

Table 12-15 -Refer to Table 12-15. In this tax system which of the following is possible?

Which of the following statements is correct?

A tax levied on the total amount spent in retail stores is called

Lump-sum taxes are equitable but not efficient.

Sue earns income of $80,000 per year. Her average tax rate is 50 percent. Sue paid $5,000 in taxes on the first $30,000 she earned. What was the marginal tax rate on the first $30,000 she earned, and what was the marginal tax rate on the remaining $50,000?

The marginal tax rate for an unmarried taxpayer in the highest taxable income category for 2013 is approximately

Table 12-5 -Refer to Table 12-5. What is the average tax rate for a person who makes $120,000?

The administrative burden of complying with tax laws is a cost to the government but not to taxpayers.

Suppose the government taxes 25 percent of the first $60,000 of income and 40 percent of all income above $60,000. For a person earning $200,000, the marginal tax rate is

The federal healthcare spending program that specifically targets the poor is called

If your income is $40,000 and your income tax liability is $5,000, your

Table 12-17 The following table shows the marginal tax rates for unmarried individuals for two years. 2009 2010 -Refer to Table 12-17. Which of the following best describes the tax schedule in 2009?

Suppose Max values a concert ticket at $45. Charles values the same concert ticket at $40. The pre-tax price of a concert ticket is $30. The government imposes a tax of $5 on each concert ticket, and the price rises to $35. The deadweight loss from the tax is

Table 12-13 The table below provides information on the 4 households that make up a small economy and how much they would pay in taxes under 3 types of taxes. -Refer to Table 12-13. In this economy Tax C exhibits