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Exam 7: Taxes

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Question 61

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A tax system achieves efficiency when: A.the "right" people actually bear the burden of taxes. B.it minimizes the costs to the economy of tax collection. C.the tax is fair. D.it is in equilibrium.

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it minimizes the cos...

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Question 62

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A tax system when the "right people actually bear the burden of taxes." A.is efficient B.is equitable C.has no deadweight loss D.is in equilibrium

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Question 63

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Figure: The Market for Yachts (Figure: The Market for Yachts) Look at the figure The Market for Yachts.If the government imposes a $60,000 tax on yachts (collected from the producers), consumers will pay ________ of the tax and producers will pay _. A.$30,000; $30,000 B.$40,000; $20,000 C.$20,000; $40,000 D.$10,000; $50,000

A politician says that a tax on good X will not increase the price of good X paid by consumers.Is there any way that this can be an accurate statement?

Deadweight losses arising from the presence of an excise tax are greatest when demand: A.and supply are relatively inelastic. B.is relatively inelastic and supply is relatively elastic C.is relatively elastic and supply is relatively inelastic. D.and supply are relatively elastic.

Taxation according to the benefits-received principle is best illustrated by: A.income tax. B.sales tax. C.gift tax. D.gasoline tax.

Economic analysis shows that workers pay of the FICA. A.exactly half B.very little C.most D.none

Eli has annual earnings of $100,000 and Molly has annual earnings of $50,000.Each consumer goes to the mall and purchases a microwave oven at a price of $100 and each pays an additional 7%, or $7, in sales tax to the state.This sales tax is an example of: A.a regressive tax. B.a wealth tax. C.a progressive tax. D.a property tax.

Figure: The Market for Music Downloads (Figure: The Market for Music Downloads) Look at the graph The Market for Music Downloads.If the government imposes a tax of $3 in this market, the deadweight loss will equal: A.$0. B.$22.50. C.$26.25. D.$52.50.

If demand is perfectly inelastic and the supply curve is upward sloping, then the burden of an excise tax is: A.borne entirely by consumers. B.borne entirely by producers. C.shared by consumers and producers, with the burden falling mainly on consumers. D.shared by consumers and producers, with the burden falling mainly on producers.

Price elasticities of demand and supply will not play a major role in determining which of the following? A.the ability of policy makers to change consumption of a good via the imposition of an excise tax B.the deadweight loss arising from the imposition of an excise tax C.the burden of the tax on consumers and producers D.administrative costs of imposing an excise tax

Figure: Market for Hotel Rooms (Figure: The Market for Hotel Rooms) Look at the figure The Market for Hotel Rooms.Suppose the equilibrium price is $110 and the equilibrium quantity is 250.If the local government levies a tax of $30 per night on each hotel room rented, the new equilibrium price will equal ________ and the new equilibrium quantity will equal _. A.$140; 100 B.$130; 150 C.$120; 200 D.$110; 250

Which of the following is the largest source of government revenue? A.sales taxes B.property taxes C.individual income taxes D.death taxes

The two principles of tax fairness are: A.the minimize-distortions principle and the maximize-revenue principle. B.the benefits principle and the ability-to-pay principle. C.the proportional-tax principle and the ability-to-pay principle. D.the equity principle and the efficiency principle.

Figure: The Market for Blue Jeans (Figure: The Market for Blue Jeans) Look at the figure The Market for Blue Jeans.The government recently levied a $10 tax on the producers of blue jeans.What area or areas in the graph identify deadweight loss? A.a + b + c B.b + d C.c + e D.d + e + f

If tax efficiency is the only goal, a tax system should be designed to minimize its: A.burden. B.administrative costs. C.impact on the poor. D.burden and its administrative costs.

Brianna and Jess must pay an income tax.Both Brianna and Jess pay $1,000 in taxes each year, but Brianna earns $20,000 and Jess earns $10,000.From this information, you can infer that the tax system is: A.progressive. B.regressive. C.proportional. D.equitable.

If the government follows an income tax system in which personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 25%, a family earning income equal to $60,000 will pay a marginal tax rate of ________ and an average tax rate of _. A.12.5%; 25% B.10%; 15% C.25%; 8.3% D.25%; 25%

Which of the following is an example of an excise tax? A.a tax of $0.41 per gallon of gas B.a tax of 12.4% of your wages C.a tax on the value of your property D.a one-time local government tax of $50

Paying a tax of $10 on an income of $100, a tax of $20 on an income of $200, and a tax of $30 on an income of $300 is an example of a: A.regressive tax. B.proportional tax. C.progressive tax. D.benefits tax.