Question 1

Table 12-5
 
-Refer to Table 12-5.What is the average tax rate for a person who makes $60,000?

Accepted Answer

A)  20%
B)  30%
C)  40%
D)  50%E) C) and D)
F) A) and B)

Question 2

A mortgage interest deduction would be considered

Accepted Answer

A)  tax evasion.
B)  a subsidy to the poor.
C)  a deduction that benefits all members of society equally.
D)  a tax loophole.E) B) and C)
F) None of the above

Question 3

Corporate profits distributed as dividends are

Accepted Answer

A)  tax free.
B)  taxed once.
C)  double taxed.
D)  triple taxed.E) A) and D)
F) A) and C)

Question 4

Table 12-6
 
-Refer to Table 12-6.What is the marginal tax rate for a person who makes $35,000?

Accepted Answer

A)  25%
B)  30%
C)  40%
D)  60%E) C) and D)
F) A) and D)

Question 5

Scenario 12-1
Suppose Jim and Joan receive great satisfaction from their consumption of cheesecake. Joan would be willing to purchase only one slice and would pay up to $6 for it. Jim would be willing to pay $9 for his first slice, $7 for his second slice, and $3 for his third slice. The current market price is $3 per slice.
-Refer to Scenario 12-1.How much total consumer surplus do Joan and Jim collectively receive from consuming cheesecake?

Accepted Answer

A)  $3
B)  $6
C)  $9
D)  $13E) All of the above
F) None of the above

Question 6

John and Rachelle face a proportional tax structure with a marginal tax rate of 25 percent.John and Rachelle each earn $60,000 per year.If John and Rachelle get married,the "marriage tax" will be

Accepted Answer

A)  0
B)  $3,750
C)  $15,000
D)  $30,000E) A) and B)
F) A) and C)

Question 7

With a lump-sum tax,the

Accepted Answer

A)  marginal tax rate is always less than the average tax rate.
B)  average tax rate is always less than the marginal tax rate.
C)  marginal tax rate falls as income rises.
D)  marginal tax rate rises as income rises.E) All of the above
F) B) and C)

Question 8

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned?

Accepted Answer

A)  20 percent
B)  30 percent
C)  50 percent
D)  70 percentE) B) and C)
F) All of the above

Question 9

Pat calculates that for every extra dollar she earns,she owes the government 33 cents.Her total income now is $35,000,on which she pays taxes of $7,000.Determine her average tax rate and her marginal tax rate.

Accepted Answer

A)  33% and 20%, respectively
B)  20% and 33%, respectively
C)  20% and 20%, respectively
D)  33% and 33%, respectivelyE) B) and C)
F) A) and D)

Question 10

The concept that people should pay taxes based on the benefits they receive from government services is called

Accepted Answer

A)  the ability-to-pay principle.
B)  the benefits principle.
C)  horizontal equity.
D)  vertical equity.E) All of the above
F) None of the above

Question 11

When compared to nonpoor countries,poor countries usually have

Accepted Answer

A)  very high tax burdens.
B)  similar tax burdens.
C)  relatively low tax burdens.
D)  no taxes because of high poverty levels.E) A) and B)
F) None of the above

Question 12

Table 12-2
United States Income Tax Rates for a Single Individual, 2002 and 2003.
 
-Refer to Table 12-2.Surbhi is a single person whose taxable income is $150,000 a year.What is her average tax rate in 2003?

Accepted Answer

A)  26.4%
B)  27.8%
C)  30%
D)  35%E) C) and D)
F) B) and D)

Question 13

Which of the following statements is correct?

Accepted Answer

A)  A general sales tax on food is regressive when low-income taxpayers spend a larger proportion of their income on food than high-income taxpayers.
B)  A general sales tax on food is regressive when middle income taxpayers spend a smaller proportion of their income on food than high-income taxpayers.
C)  A general sales tax on food is regressive when high-income taxpayers spend a larger proportion of their income on food than middle income taxpayers.
D)  A general sales tax on food is regressive when high-income taxpayers spend a larger proportion of their income on food than low-income taxpayers.E) All of the above
F) A) and B)

Question 14

Table 12-3
 
-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?

Accepted Answer

A)  $85 and $65 respectively
B)  $49 and $35 respectively
C)  $47 and $27 respectively
D)  $37 and $17 respectivelyE) A) and D)
F) A) and B)

Question 15

Vertical equity states that taxpayers with a greater ability to pay taxes should

Accepted Answer

A)  contribute a decreasing proportion of each increment in income to taxes.
B)  contribute a larger amount than those with a lesser ability to pay.
C)  be less subject to administrative burdens of a tax.
D)  be less subject to tax distortions that lead to deadweight losses.E) B) and D)
F) All of the above

Question 16

When a state levies a sales tax,the tax

Accepted Answer

A)  is paid only by the state's residents.
B)  occasionally excludes items that are deemed to be necessities.
C)  is commonly levied on labor services.
D)  applies to wholesale purchases but not retail purchases.E) A) and D)
F) A) and C)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Becky's average tax rate on her November income is 15 percent.The marginal tax rate on her December income of $10,000 exceeds her average tax rate.The tax liability on her December income will be

Accepted Answer

A)  less than $1,500.
B)  exactly equal $1,500.
C)  greater than $1,500.
D)  From the information provided, any of the answers above could be correct.E) A) and B)
F) A) and C)

Question 19

Which of the following is not a way that a corporate tax on the income of U.S.car companies will affect markets?

Accepted Answer

A)  The price of cars will rise.
B)  The wages of auto workers will fall.
C)  Owners of car companies (stockholders)  will receive less profit.
D)  Less deadweight loss will occur since corporations are entities and not people who respond to incentives.E) B) and D)
F) A) and B)

Question 20

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

Accepted Answer

A)  Medicaid.
B)  Medicare.
C)  National Institutes of Health.
D)  Blue Cross/Blue Shield.E) A) and C)
F) All of the above

Exam 12: The Design of the Tax System

Table 12-2 United States Income Tax Rates for a Single Individual, 2002 and 2003. -Refer to Table 12-2.Surbhi is a single person whose taxable income is $150,000 a year.What is her average tax rate in 2003?

Correct Answer
verified

John and Rachelle face a proportional tax structure with a marginal tax rate of 25 percent.John and Rachelle each earn $60,000 per year.If John and Rachelle get married,the "marriage tax" will be

Correct Answer
verified

A mortgage interest deduction would be considered

Correct Answer
verified

When a state levies a sales tax,the tax

Correct Answer
verified

When compared to nonpoor countries,poor countries usually have

Correct Answer
verified

Which of the following is not a way that a corporate tax on the income of U.S.car companies will affect markets?

Correct Answer
verified

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

Correct Answer
verified

Vertical equity states that taxpayers with a greater ability to pay taxes should

Correct Answer
verified

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned?

Correct Answer
verified

With a lump-sum tax,the

Correct Answer
verified

Corporate profits distributed as dividends are

Correct Answer
verified

Table 12-6 -Refer to Table 12-6.What is the marginal tax rate for a person who makes $35,000?

Correct Answer
verified

Table 12-5 -Refer to Table 12-5.What is the average tax rate for a person who makes $60,000?

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Becky's average tax rate on her November income is 15 percent.The marginal tax rate on her December income of $10,000 exceeds her average tax rate.The tax liability on her December income will be

Correct Answer
verified

The concept that people should pay taxes based on the benefits they receive from government services is called

Correct Answer
verified

Pat calculates that for every extra dollar she earns,she owes the government 33 cents.Her total income now is $35,000,on which she pays taxes of $7,000.Determine her average tax rate and her marginal tax rate.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Table 12-3 -Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?

Correct Answer
verified

Exam 12: The Design of the Tax System

Table 12-2 United States Income Tax Rates for a Single Individual, 2002 and 2003. -Refer to Table 12-2.Surbhi is a single person whose taxable income is $150,000 a year.What is her average tax rate in 2003?

Correct AnswerverifiedShow Answer

John and Rachelle face a proportional tax structure with a marginal tax rate of 25 percent.John and Rachelle each earn $60,000 per year.If John and Rachelle get married,the "marriage tax" will be

Correct AnswerverifiedShow Answer

A mortgage interest deduction would be considered

Correct AnswerverifiedShow Answer

When a state levies a sales tax,the tax

Correct AnswerverifiedShow Answer

When compared to nonpoor countries,poor countries usually have

Correct AnswerverifiedShow Answer

Which of the following is not a way that a corporate tax on the income of U.S.car companies will affect markets?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Vertical equity states that taxpayers with a greater ability to pay taxes should

Correct AnswerverifiedShow Answer

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned?

Correct AnswerverifiedShow Answer

With a lump-sum tax,the

Correct AnswerverifiedShow Answer

Corporate profits distributed as dividends are

Correct AnswerverifiedShow Answer

Table 12-6 -Refer to Table 12-6.What is the marginal tax rate for a person who makes $35,000?

Correct AnswerverifiedShow Answer

Table 12-5 -Refer to Table 12-5.What is the average tax rate for a person who makes $60,000?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Becky's average tax rate on her November income is 15 percent.The marginal tax rate on her December income of $10,000 exceeds her average tax rate.The tax liability on her December income will be

Correct AnswerverifiedShow Answer

The concept that people should pay taxes based on the benefits they receive from government services is called

Correct AnswerverifiedShow Answer

Pat calculates that for every extra dollar she earns,she owes the government 33 cents.Her total income now is $35,000,on which she pays taxes of $7,000.Determine her average tax rate and her marginal tax rate.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 12-3 -Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified