Question 1

Table 12-14
 
-Refer to Table 12-14.A regressive tax is illustrated by tax

Accepted Answer

A)   A only.
B)   B or D.
C)   C only.
D)   A or D.E) C) and D)
F) B) and D)

Question 2

As of 2007,the largest source of receipts for state and local governments was corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 3

In 1789,the average American paid approximately what percent of income in taxes?

Accepted Answer

A)   5%
B)   15%
C)   33%
D)   50%E) A) and D)
F) A) and C)

Question 4

Economists define a business's "value added" as

Accepted Answer

A)   the amount the firm pays for goods and services less the revenue from the sale of goods and services.
B)   the revenue from the sale of goods and services less the amount the firm pays for goods and services.
C)   the total value of the goods and services created by the firm.
D)   the value that consumers place on the goods and services created by the firm.E) A) and B)
F) A) and C)

Question 5

Taxes create deadweight losses because they

Accepted Answer

A)   reduce costs for firms.
B)   distort incentives.
C)   cause prices to decrease.
D)   create revenue for the government.E) None of the above
F) All of the above

Question 6

The marginal tax rates on the richest Americans when Ronald Reagan was elected and left office were

Accepted Answer

A)   28 percent and 50 percent, respectively.
B)   70 percent and 40 percent, respectively.
C)   40 percent and 70 percent, respectively.
D)   50 percent and 28 percent, respectively.E) All of the above
F) B) and C)

Question 7

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in.This charge is most like

Accepted Answer

A)   an excise tax which conforms to the benefits principle.
B)   an excise tax which violates the benefits principle.
C)   a lump-sum tax which conforms to the benefits principle.
D)   a lump-sum tax which violates the benefits principle.E) None of the above
F) C) and D)

Question 8

Rank the following state and local government expenditure categories from smallest to largest.

Accepted Answer

A)   education, public welfare, highways
B)   education, highways, public welfare
C)   highways, public welfare, education
D)   public welfare, education, highways.E) A) and D)
F) B) and C)

Question 9

Table 12-3
 
-Refer to Table 12-3.Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing.What is the value of the surplus that accrues to all four skiers from their weekend trip?

Accepted Answer

A)   $75
B)   $105
C)   $185
D)   $215E) B) and C)
F) None of the above

Question 10

The concept of a "welfare program" is most closely associated with which particular federal government program?

Accepted Answer

A)   spending on medical research
B)   Temporary Assistance for Needy Families (TANF) 
C)   Medicare
D)   Social SecurityE) A) and C)
F) B) and C)

Question 11

Some states do not have a state income tax.

Accepted Answer

A) True 
 B)False

Question 12

The government finances the budget deficit by

Accepted Answer

A)   borrowing from the public.
B)   borrowing solely from the Federal Reserve Bank.
C)   printing currency in the amount of the budget deficit.
D)   requiring that budget surpluses occur every other year to pay off the deficits.E) All of the above
F) C) and D)

Question 13

Table 12-1
 
-Refer to Table 12-1.If Betina has $170,000 in taxable income,her marginal tax rate is

Accepted Answer

A)   25%.
B)   28%.
C)   33%.
D)   35%.E) B) and D)
F) A) and D)

Question 14

In the United States,all families pay the same proportion of their income in taxes.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Accepted Answer

A)   tax evasion
B)   a political payoff
C)   a tax loophole
D)   compensation for the benefit of societyE) B) and D)
F) A) and D)

Question 16

Which of the following is not a cost of taxes to taxpayers?

Accepted Answer

A)   the tax payment itself
B)   deadweight losses
C)   administrative burdens
D)   goods and services provided by the governmentE) B) and D)
F) All of the above

Question 17

The U.S.federal government spends its revenues in a number of ways.Rank the following spending categories from largest to smallest.

Accepted Answer

A)   Social Security, national defense, income security, net interest
B)   health care, national defense, net interest, income security
C)   Social Security, health care, national defense, Medicare
D)   national defense, Social Security, net interest, income securityE) All of the above
F) A) and D)

Question 18

A lump-sum tax

Accepted Answer

A)   is most frequently used to tax real property.
B)   does not distort incentives.
C)   distorts incentives more than any other type of tax.
D)   is the most fair tax.E) B) and C)
F) None of the above

Question 19

Scenario 12-2
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 12-2.Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9.What is the deadweight loss of the tax?

Accepted Answer

A)   $3
B)   $6
C)   $8
D)   $9E) A) and B)
F) All of the above

Question 20

The two taxes that together provide the U.S.federal government with approximately 85 percent of its revenue are

Accepted Answer

A)   individual income taxes and property taxes.
B)   individual income taxes and corporate income taxes.
C)   individual income taxes and payroll taxes.
D)   sales taxes and payroll taxes.E) C) and D)
F) B) and C)

Exam 12: The Design of the Tax System.

Table 12-14 -Refer to Table 12-14.A regressive tax is illustrated by tax

Correct Answer
verified

In the United States,all families pay the same proportion of their income in taxes.

Correct Answer
verified

Taxes create deadweight losses because they

Correct Answer
verified

Economists define a business's "value added" as

Correct Answer
verified

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Correct Answer
verified

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in.This charge is most like

Correct Answer
verified

A lump-sum tax

Correct Answer
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Table 12-1 -Refer to Table 12-1.If Betina has $170,000 in taxable income,her marginal tax rate is

Correct Answer
verified

Table 12-3 -Refer to Table 12-3.Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing.What is the value of the surplus that accrues to all four skiers from their weekend trip?

Correct Answer
verified

As of 2007,the largest source of receipts for state and local governments was corporate income taxes.

Correct Answer
verified

The U.S.federal government spends its revenues in a number of ways.Rank the following spending categories from largest to smallest.

Correct Answer
verified

The government finances the budget deficit by

Correct Answer
verified

Some states do not have a state income tax.

Correct Answer
verified

Which of the following is not a cost of taxes to taxpayers?

Correct Answer
verified

Correct Answer
verified

The two taxes that together provide the U.S.federal government with approximately 85 percent of its revenue are

Correct Answer
verified

The concept of a "welfare program" is most closely associated with which particular federal government program?

Correct Answer
verified

The marginal tax rates on the richest Americans when Ronald Reagan was elected and left office were

Correct Answer
verified

In 1789,the average American paid approximately what percent of income in taxes?

Correct Answer
verified

Rank the following state and local government expenditure categories from smallest to largest.

Correct Answer
verified

Exam 12: The Design of the Tax System.

Table 12-14 -Refer to Table 12-14.A regressive tax is illustrated by tax

Correct AnswerverifiedShow Answer

In the United States,all families pay the same proportion of their income in taxes.

Correct AnswerverifiedShow Answer

Taxes create deadweight losses because they

Correct AnswerverifiedShow Answer

Economists define a business's "value added" as

Correct AnswerverifiedShow Answer

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Correct AnswerverifiedShow Answer

Some colleges charge all students the same "activity fee." Suppose that students differ by how many campus activities they engage in.This charge is most like

Correct AnswerverifiedShow Answer

A lump-sum tax

Correct AnswerverifiedShow Answer

Table 12-1 -Refer to Table 12-1.If Betina has $170,000 in taxable income,her marginal tax rate is

Correct AnswerverifiedShow Answer

Table 12-3 -Refer to Table 12-3.Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing.What is the value of the surplus that accrues to all four skiers from their weekend trip?

Correct AnswerverifiedShow Answer

As of 2007,the largest source of receipts for state and local governments was corporate income taxes.

Correct AnswerverifiedShow Answer

The U.S.federal government spends its revenues in a number of ways.Rank the following spending categories from largest to smallest.

Correct AnswerverifiedShow Answer

The government finances the budget deficit by

Correct AnswerverifiedShow Answer

Some states do not have a state income tax.

Correct AnswerverifiedShow Answer

Which of the following is not a cost of taxes to taxpayers?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The two taxes that together provide the U.S.federal government with approximately 85 percent of its revenue are

Correct AnswerverifiedShow Answer

The concept of a "welfare program" is most closely associated with which particular federal government program?

Correct AnswerverifiedShow Answer

The marginal tax rates on the richest Americans when Ronald Reagan was elected and left office were

Correct AnswerverifiedShow Answer

In 1789,the average American paid approximately what percent of income in taxes?

Correct AnswerverifiedShow Answer

Rank the following state and local government expenditure categories from smallest to largest.

Correct AnswerverifiedShow Answer

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