Question 1

U.S.taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns.This administrative cost

Accepted Answer

A)  is part of the deadweight loss of taxation.
B)  is equal to the value of consumer surplus associated with the income tax system.
C)  can be claimed as a deduction on income tax returns.
D)  is larger for individuals in the lowest income quintile than for individuals in the highest income quintile.E) None of the above
F) A) and C)

Question 2

The decision to make the U.S.income tax system progressive was

Accepted Answer

A)  a progressive decision.
B)  a positive decision.
C)  a decision that was needed to minimize the excess burden of taxation.
D)  a normative decision.E) B) and C)
F) A) and B)

Question 3

For many U.S.individuals and households,replacing the federal income tax with a consumption tax would not make a major change in their tax liability - the amount they would be taxed.Which of the individuals described would be least affected by replacing the income tax with a consumption tax?

Accepted Answer

A)  A person in the lowest income bracket.This person would pay little or no tax under either system.
B)  A high-income individual who saves 35 percent of this income and uses his savings to purchase stocks and bonds.
C)  A female head of family,with no husband present.
D)  A taxpayer who puts part of her savings into a 401(k) retirement plan and in an Individual Retirement Account.E) A) and D)
F) A) and B)

Question 4

Economists often analyze the interaction of individuals and firms in markets.Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others,a process that is referred to as

Accepted Answer

A)  rent seeking.
B)  logrolling.
C)  government failure.
D)  the public choice initiative.E) None of the above
F) A) and D)

Question 5

Many economists believe that when the federal government establishes an agency to regulate a particular industry,the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

Accepted Answer

A)  regulatory capture
B)  logrolling
C)  special interest regulation
D)  the regulatory paradoxE) A) and B)
F) A) and C)

Question 6

If your income is $92,000 and you pay taxes of $19,475,what is your average tax rate? Show your work.

Accepted Answer

Average tax rate = $...

Question 7

Figure 18-1 
-Refer to Figure 18-1.Area F+G represents

Accepted Answer

A)  the portion of sales tax revenue borne by consumers.
B)  the portion of sales tax revenue borne by producers.
C)  the excess burden of the sales tax.
D)  sales tax revenue collected by the government.E) A) and C)
F) B) and C)

Question 8

A key insight of the public choice model is that public policymakers are likely to pursue the public's interest,even if their self-interests conflict with the public interest.

Accepted Answer

A) True 
 B)False

Question 9

All Gini coefficients must lie between 0 and 1.The lower the value,

Accepted Answer

A)  the more unequal the income distribution.
B)  the closer the income distribution is to being equal.
C)  the greater the degree of poverty.
D)  the lower the degree of poverty according to the federal government's definition of poverty.E) B) and D)
F) A) and D)

Question 10

Vertical-equity is most closely associated with which of the following goals or principles?

Accepted Answer

A)  the horizontal-equity principle
B)  the goal of economic efficiency
C)  the goal of attaining social objectives
D)  the ability-to-pay principleE) None of the above
F) A) and D)

Question 11

Rent seeking behavior,unlike profit maximizing behavior in competitive markets,wastes society's scarce resources.

Accepted Answer

A) True 
 B)False

Question 12

Former Alabama Governor George Wallace ran for president several times,once as a third-party candidate in 1968.Wallace claimed there was "not a dime's worth of difference" between the Democratic and Republican parties during one of his campaigns.How does Wallace's comment relate to the median voter theorem?

Accepted Answer

To win his party's nomination for presid...

Question 13

Economists caution that conventional statistics used to estimate the extent of poverty in the United States fail to account for benefits people receive that,if considered,would reduce the amount of poverty.Which of the following is an example of these benefits?

Accepted Answer

A)  Individuals can use tax credits and the personal exemption to reduce their taxable incomes.This reduces what they owe the government and increases their disposable incomes.
B)  The federal income tax system is progressive.As a result,the poor have higher after-tax incomes than they would have if the income tax system was proportional or progressive.
C)  Individuals with low incomes receive non-cash benefits such as free school lunches and food stamps.
D)  The federal minimum wage forces employers to pay workers with low skills an efficiency wage.E) B) and C)
F) C) and D)

Question 14

A tax is efficient if

Accepted Answer

A)  individuals with the lowest incomes pay proportionately lower taxes than individuals with the highest incomes.
B)  it is based on profits earned and not on wages.
C)  it encourages saving and investment.
D)  it imposes a small excess burden relative to the revenue it raises.E) B) and C)
F) A) and C)

Question 15

Table 18-2
 
-Refer to Table 18-2.The table above outlines the rankings of three members of the U.S.House of Representatives on three spending alternatives.Assume that Congress can spend additional revenue on only one of the three spending alternatives and that Tom,Dick and Harriet,all members of the House of Representatives,participate in a series of votes in which they are to determine which of the spending alternatives should receive funding.Three votes will be taken: (1)Foreign Aid and Post-Secondary Education (2)Foreign Aid and Roads and Bridges and (3)Post-Secondary Education and Roads and Bridges.
Determine whether the voting paradox will occur as a result of these votes.

Accepted Answer

First vote: <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> First vote: the majority vo...

Question 16

An income tax system is ________ if marginal tax rates increase as income increases.

Accepted Answer

A)  progressive
B)  regressive
C)  efficient
D)  equitableE) B) and D)
F) A) and D)

Question 17

What is a Lorenz curve and what is a Gini coefficient?

Accepted Answer

A Lorenz curve is a curve that shows the...

Question 18

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the source of revenue for Medicare and Social Security in the United States?

Accepted Answer

A)  individual income taxes
B)  sales taxes
C)  social insurance taxes
D)  property taxesE) B) and C)
F) A) and C)

Question 20

Both presidents Kennedy and Reagan proposed significant cuts in income taxes because

Accepted Answer

A)  at the time of their proposals the federal government was experiencing budget surpluses; that is,tax revenue exceeded government expenditures.
B)  they wanted to offset their proposals to increase other taxes.
C)  state governments had increased their taxes and they believed the tax cuts they proposed would result in most citizens paying about the same total state and federal taxes.
D)  they believed that the tax cuts would enhance economic efficiency.E) A) and B)
F) A) and C)

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

An income tax system is ________ if marginal tax rates increase as income increases.

Correct Answer
verified

Vertical-equity is most closely associated with which of the following goals or principles?

Correct Answer
verified

Both presidents Kennedy and Reagan proposed significant cuts in income taxes because

Correct Answer
verified

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

Correct Answer
verified

Which of the following is the source of revenue for Medicare and Social Security in the United States?

Correct Answer
verified

What is a Lorenz curve and what is a Gini coefficient?

Correct Answer
verified
A Lorenz curve is a curve that shows the...
View Answer

Economists caution that conventional statistics used to estimate the extent of poverty in the United States fail to account for benefits people receive that,if considered,would reduce the amount of poverty.Which of the following is an example of these benefits?

Correct Answer
verified

Correct Answer
verified
First vote: First vote: the majority vo...
View Answer

Correct Answer
verified
To win his party's nomination for presid...
View Answer

A tax is efficient if

Correct Answer
verified

The decision to make the U.S.income tax system progressive was

Correct Answer
verified

A key insight of the public choice model is that public policymakers are likely to pursue the public's interest,even if their self-interests conflict with the public interest.

Correct Answer
verified

Figure 18-1 -Refer to Figure 18-1.Area F+G represents

Correct Answer
verified

If your income is $92,000 and you pay taxes of $19,475,what is your average tax rate? Show your work.

Correct Answer
verified
Average tax rate = $...
View Answer

U.S.taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns.This administrative cost

Correct Answer
verified

Many economists believe that when the federal government establishes an agency to regulate a particular industry,the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

Correct Answer
verified

All Gini coefficients must lie between 0 and 1.The lower the value,

Correct Answer
verified

Economists often analyze the interaction of individuals and firms in markets.Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others,a process that is referred to as

Correct Answer
verified

For many U.S.individuals and households,replacing the federal income tax with a consumption tax would not make a major change in their tax liability - the amount they would be taxed.Which of the individuals described would be least affected by replacing the income tax with a consumption tax?

Correct Answer
verified

Rent seeking behavior,unlike profit maximizing behavior in competitive markets,wastes society's scarce resources.

Correct Answer
verified

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

An income tax system is ________ if marginal tax rates increase as income increases.

Correct AnswerverifiedShow Answer

Vertical-equity is most closely associated with which of the following goals or principles?

Correct AnswerverifiedShow Answer

Both presidents Kennedy and Reagan proposed significant cuts in income taxes because

Correct AnswerverifiedShow Answer

The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

Correct AnswerverifiedShow Answer

Which of the following is the source of revenue for Medicare and Social Security in the United States?

Correct AnswerverifiedShow Answer

What is a Lorenz curve and what is a Gini coefficient?

Correct AnswerverifiedA Lorenz curve is a curve that shows the...View AnswerShow Answer

Economists caution that conventional statistics used to estimate the extent of poverty in the United States fail to account for benefits people receive that,if considered,would reduce the amount of poverty.Which of the following is an example of these benefits?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFirst vote: First vote: the majority vo...View AnswerShow Answer

Correct AnswerverifiedTo win his party's nomination for presid...View AnswerShow Answer

A tax is efficient if

Correct AnswerverifiedShow Answer

The decision to make the U.S.income tax system progressive was

Correct AnswerverifiedShow Answer

A key insight of the public choice model is that public policymakers are likely to pursue the public's interest,even if their self-interests conflict with the public interest.

Correct AnswerverifiedShow Answer

Figure 18-1 -Refer to Figure 18-1.Area F+G represents

Correct AnswerverifiedShow Answer

If your income is $92,000 and you pay taxes of $19,475,what is your average tax rate? Show your work.

Correct AnswerverifiedAverage tax rate = $...View AnswerShow Answer

U.S.taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns.This administrative cost

Correct AnswerverifiedShow Answer

Many economists believe that when the federal government establishes an agency to regulate a particular industry,the regulated firms try to influence the agency even if these actions do not benefit the public.Economists refer to this result of government regulation by which of the following terms?

Correct AnswerverifiedShow Answer

All Gini coefficients must lie between 0 and 1.The lower the value,

Correct AnswerverifiedShow Answer

Economists often analyze the interaction of individuals and firms in markets.Economists also examine the actions of individuals and firms as they attempt to use government to make themselves better off at the expense of others,a process that is referred to as

Correct AnswerverifiedShow Answer

For many U.S.individuals and households,replacing the federal income tax with a consumption tax would not make a major change in their tax liability - the amount they would be taxed.Which of the individuals described would be least affected by replacing the income tax with a consumption tax?

Correct AnswerverifiedShow Answer

Rent seeking behavior,unlike profit maximizing behavior in competitive markets,wastes society's scarce resources.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A Lorenz curve is a curve that shows the...
View Answer

Correct Answer
verified

Correct Answer
verified
First vote: First vote: the majority vo...
View Answer

Correct Answer
verified
To win his party's nomination for presid...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Average tax rate = $...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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