Question 1

Which of the following taxes is least likely to be shifted?

Accepted Answer

A)  a federal excise tax on grapefruit
B)  a sales tax on some foodstuffs
C)  a personal income tax
D)  a state tax on football ticketsE) B) and C)
F) A) and B)

Question 2

The authors of the text suggest that a comprehensive personal income tax with few loopholes would be efficient and equitable.What is their reasoning for this statement?

Accepted Answer

They argue that a personal income tax wi...

Question 3

Which is the correct order of importance in terms of revenue collected among the following federal taxes?

Accepted Answer

A)  (1)  corporate income taxes (2)  value-added taxes (3)  excise taxes
B)  (1)  personal income taxes (2)  corporate income taxes (3)  sales taxes
C)  (1)  payroll taxes (2)  personal income taxes (3)  federal excise taxes
D)  (1)  personal income taxes (2)  payroll taxes (3)  corporate income taxesE) B) and C)
F) A) and C)

Question 4

In the spring of 1993,President Clinton proposed an energy tax.At one point in the congressional review of the proposal there was discussion of various exemptions for farmers,truckers,etc.One plan was to dye fuel different colors to better track the appropriate tax on the user of the fuel.Economists would label these exemptions

Accepted Answer

A)  loopholes.
B)  economically efficient.
C)  obviously fair.
D)  all of the above.E) C) and D)
F) A) and B)

Question 5

Indirect taxes are levied on specific economic activities.

Accepted Answer

A) True 
 B)False

Question 6

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax,which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Accepted Answer

A)  the benefits principle.
B)  the excess burden principle.
C)  the ability-to-pay principle.
D)  the constitutional principle.E) B) and D)
F) B) and C)

Question 7

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Accepted Answer

A) True 
 B)False

Question 8

The system of grants from one level of government to another is an example of fiscal federalism.

Accepted Answer

A) True 
 B)False

Question 9

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Accepted Answer

A)  capital gains.
B)  interest on corporate bonds.
C)  interest on municipal bonds.
D)  offset by mortgage interest.E) B) and C)
F) A) and B)

Question 10

Compared to other countries,the U.S.federal government relies

Accepted Answer

A)  more heavily on direct taxes than do governments of other countries.
B)  less heavily on direct taxes than do governments of other countries.
C)  more heavily on indirect taxes than do governments of other countries.
D)  on direct taxes about as heavily as do governments of other countries.E) B) and C)
F) A) and D)

Question 11

Taxes on sales of liquor,tobacco,and tires are examples of

Accepted Answer

A)  direct taxes.
B)  excise taxes.
C)  progressive taxation.
D)  loopholes.E) A) and B)
F) None of the above

Question 12

The excess burden of an excise tax is

Accepted Answer

A)  greater the more inelastic the supply curve.
B)  greater the more elastic the demand curve.
C)  smaller the more elastic the supply curve.
D)  greater the more inelastic the demand curve.E) C) and D)
F) B) and D)

Question 13

Figure 18-3
 
-In which panel of Figure 18-3 would an excise tax be borne entirely by the supplier?

Accepted Answer

A)  1
B)  2
C)  3
D)  4E) B) and C)
F) A) and D)

Question 14

State and local governments receive money from sales taxes,property taxes,and the federal government.

Accepted Answer

A) True 
 B)False

Question 15

"People who make more money should pay higher taxes" is an example of

Accepted Answer

A)  the benefits principle.
B)  horizontal equity.
C)  vertical efficiency.
D)  the ability-to-pay principle.E) B) and D)
F) C) and D)

Question 16

Taxation may improve the social welfare when the taxed good

Accepted Answer

A)  is socially undesirable (like, in some views, liquor and pornography) .
B)  imposes negative externalities.
C)  is overproduced under a free-market system.
D)  All of the above are correct.E) B) and C)
F) A) and C)

Question 17

Under a proportional tax,the fraction of income paid in taxes

Accepted Answer

A)  rises as income rises.
B)  is unchanged as income changes.
C)  falls as income rises.
D)  is proportional to the change in income.E) A) and D)
F) B) and C)

Question 18

What were the arguments in favor and against repealing the Bush tax cuts?

Accepted Answer

The arguments against repealing the Bush...

Question 19

Which of the following taxes is most likely to be shifted?

Accepted Answer

A)  a property tax on an owner-occupied residence
B)  a progressive income tax
C)  a flat-rate state income tax
D)  a general sales taxE) A) and B)
F) A) and D)

Question 20

The largest single category of expenditures in the federal budget is traditionally

Accepted Answer

A)  national defense.
B)  interest on the national debt.
C)  health and public housing programs.
D)  pensions and income security programs.E) A) and D)
F) B) and C)

Exam 18: Taxation and Resource Allocation

Indirect taxes are levied on specific economic activities.

Correct Answer
verified

Which is the correct order of importance in terms of revenue collected among the following federal taxes?

Correct Answer
verified

Under a proportional tax,the fraction of income paid in taxes

Correct Answer
verified

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax,which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Correct Answer
verified

Correct Answer
verified

State and local governments receive money from sales taxes,property taxes,and the federal government.

Correct Answer
verified

The authors of the text suggest that a comprehensive personal income tax with few loopholes would be efficient and equitable.What is their reasoning for this statement?

Correct Answer
verified
They argue that a personal income tax wi...
View Answer

The system of grants from one level of government to another is an example of fiscal federalism.

Correct Answer
verified

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Correct Answer
verified

Taxes on sales of liquor,tobacco,and tires are examples of

Correct Answer
verified

Compared to other countries,the U.S.federal government relies

Correct Answer
verified

"People who make more money should pay higher taxes" is an example of

Correct Answer
verified

Which of the following taxes is most likely to be shifted?

Correct Answer
verified

Which of the following taxes is least likely to be shifted?

Correct Answer
verified

What were the arguments in favor and against repealing the Bush tax cuts?

Correct Answer
verified
The arguments against repealing the Bush...
View Answer

Figure 18-3 -In which panel of Figure 18-3 would an excise tax be borne entirely by the supplier?

Correct Answer
verified

The largest single category of expenditures in the federal budget is traditionally

Correct Answer
verified

The excess burden of an excise tax is

Correct Answer
verified

Taxation may improve the social welfare when the taxed good

Correct Answer
verified

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Correct Answer
verified

Exam 18: Taxation and Resource Allocation

Indirect taxes are levied on specific economic activities.

Correct AnswerverifiedShow Answer

Which is the correct order of importance in terms of revenue collected among the following federal taxes?

Correct AnswerverifiedShow Answer

Under a proportional tax,the fraction of income paid in taxes

Correct AnswerverifiedShow Answer

In England the Thatcher government substituted a "poll tax" for the local property tax.People took strong exception to the tax,which is basically a head or "lump sum" tax.The principle of taxation such a tax violates is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

State and local governments receive money from sales taxes,property taxes,and the federal government.

Correct AnswerverifiedShow Answer

The authors of the text suggest that a comprehensive personal income tax with few loopholes would be efficient and equitable.What is their reasoning for this statement?

Correct AnswerverifiedThey argue that a personal income tax wi...View AnswerShow Answer

The system of grants from one level of government to another is an example of fiscal federalism.

Correct AnswerverifiedShow Answer

A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases.

Correct AnswerverifiedShow Answer

Taxes on sales of liquor,tobacco,and tires are examples of

Correct AnswerverifiedShow Answer

Compared to other countries,the U.S.federal government relies

Correct AnswerverifiedShow Answer

"People who make more money should pay higher taxes" is an example of

Correct AnswerverifiedShow Answer

Which of the following taxes is most likely to be shifted?

Correct AnswerverifiedShow Answer

Which of the following taxes is least likely to be shifted?

Correct AnswerverifiedShow Answer

What were the arguments in favor and against repealing the Bush tax cuts?

Correct AnswerverifiedThe arguments against repealing the Bush...View AnswerShow Answer

Figure 18-3 -In which panel of Figure 18-3 would an excise tax be borne entirely by the supplier?

Correct AnswerverifiedShow Answer

The largest single category of expenditures in the federal budget is traditionally

Correct AnswerverifiedShow Answer

The excess burden of an excise tax is

Correct AnswerverifiedShow Answer

Taxation may improve the social welfare when the taxed good

Correct AnswerverifiedShow Answer

Mrs.Dodge has $8 million in income and pays no income taxes.Her income is most likely

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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They argue that a personal income tax wi...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The arguments against repealing the Bush...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified