Question 1

A lump-sum tax:

Accepted Answer

A)  takes the same percentage of taxes from income from all taxpayers.
B)  requires those with low incomes to pay a smaller percentage of their income than high-income people.
C)  is levied in such a way that low-income taxpayers pay a greater proportion of their income toward taxes than do high-income taxpayers.
D)  None of these statements is true.E) A) and B)
F) A) and C)

Question 2

A bridge that typically gets 1,000 cars per day is installing a new toll next week of $.50 per car.The tax revenues generated will be:

Accepted Answer

A)  $1,000.
B)  $500.
C)  less than $500.
D)  between $500 and $1,000.E) A) and D)
F) C) and D)

Question 3

A tax in an efficient market:

Accepted Answer

A)  increases efficiency.
B)  decreases total surplus.
C)  maximizes total surplus.
D)  often fails to generate revenue.E) B) and D)
F) A) and C)

Question 4

A tax that requires those with low incomes to pay a smaller percentage of their income than high-income earners is a:

Accepted Answer

A)  proportional tax.
B)  progressive tax.
C)  regressive tax.
D)  flat tax.E) B) and C)
F) A) and C)

Question 5

The third largest source of government tax revenues that contributes roughly 10 percent to total revenues is:

Accepted Answer

A)  payroll tax.
B)  personal income tax.
C)  corporate income tax.
D)  excise tax.E) C) and D)
F) None of the above

Question 6

A tax that is levied in such a way that low-income taxpayers pay a greater proportion of their income toward taxes than do high-income taxpayers is called a:

Accepted Answer

A)  proportional tax.
B)  progressive tax.
C)  regressive tax.
D)  flat tax.E) A) and D)
F) C) and D)

Question 7

The surplus that is lost and not converted to tax revenue when a tax is imposed is:

Accepted Answer

A)  deadweight loss.
B)  value that disappears.
C)  not transferred to anyone else.
D)  All of these statements are true.E) A) and C)
F) None of the above

Question 8

If Janice earns $50,000 a year and pays $500 in taxes,and Cam earns $100,000 a year and pays $20,000 in taxes,the tax system must be:

Accepted Answer

A)  progressive.
B)  regressive.
C)  proportional.
D)  lump-sum.E) A) and B)
F) A) and C)

Question 9

A flat tax:

Accepted Answer

A)  takes the same percentage of taxes from income from all taxpayers.
B)  requires those with low incomes to pay a smaller percentage of their income than high-income people.
C)  is levied in such a way that low-income taxpayers pay a greater proportion of their income toward taxes than do high-income taxpayers.
D)  None of these statements is true.E) C) and D)
F) A) and B)

Question 10

Deficits and surpluses are commonly calculated as:

Accepted Answer

A)  a percentage of national GDP.
B)  debt per taxpayer.
C)  average debt per state.
D)  All of these are common calculations.E) A) and B)
F) A) and C)

Question 11

The statutory incidence of a tax ______________ the economic incidence of the tax.

Accepted Answer

A)  has no effect on
B)  determines
C)  often can predict
D)  is the same asE) A) and B)
F) A) and C)

Question 12

If Bob earns $20,000 per year and Sue earns $100,000 a year,and there is a flat tax of 10 percent imposed,then Bob would pay __________,Sue would pay ___________,and this would be a __________ tax.

Accepted Answer

A)  $2,000;$10,000;proportional
B)  $2,000;$10,000;progressive
C)  $2,000;$10,000;lump-sum tax
D)  $200;$1,000;flat taxE) A) and D)
F) B) and C)

Question 13

The difference between the loss of surplus to taxpayers and the tax revenue collected is called:

Accepted Answer

A)  deadweight loss.
B)  an externality.
C)  consumer surplus.
D)  producer surplus.E) All of the above
F) None of the above

Question 14

Deadweight loss as a result of taxation occurs because:

Accepted Answer

A)  the quantity of a good that is bought and sold is below the market equilibrium quantity.
B)  the quantity of a good that is bought and sold is above the market equilibrium quantity.
C)  the price that is charged the consumer is lower than the price the seller receives.
D)  None of these statements is true.E) A) and B)
F) A) and C)

Question 15

An example of a tax specifically designed to reduce consumption of a good is a tax on:

Accepted Answer

A)  chocolate.
B)  cigarettes.
C)  coffee.
D)  All of these are examples of a tax.E) A) and B)
F) A) and C)

Question 16

A lump-sum tax is:

Accepted Answer

A)  a tax that charges the same amount to each taxpayer,regardless of their economic behavior or circumstances.
B)  a tax that is charged once per year,in a lump sum,rather than throughout the year.
C)  generally tied to spending habits,not income levels.
D)  generally tied to income levels,not spending habits.E) None of the above
F) B) and C)

Question 17

Entitlement spending:

Accepted Answer

A)  is public expenditure that is mandated and regulated by permanent laws.
B)  rises and falls with the number of people who are eligible recipients.
C)  cannot be reduced without changing the laws outlining eligibility.
D)  All of these statements are true.E) All of the above
F) None of the above

Question 18

The idea that people change their behavior in response to taxes is

Accepted Answer

A)  uncontroversial among economists.
B)  highly controversial among economists.
C)  accepted by economists,but debated by those in Congress.
D)  None of these statements is true.E) B) and C)
F) A) and C)

Question 19

A helpful way to put government revenues into context is to think about it:

Accepted Answer

A)  as an average amount paid per taxpayer.
B)  as a percentage of the country's GDP.
C)  by comparing the percentage of a country's GDP collected in taxes to other countries' percentage of GDP.
D)  All of these approaches can be helpful in understanding tax revenues.E) B) and D)
F) All of the above

Question 20

A tax on the wages paid to an employee is called the:

Accepted Answer

A)  payroll tax.
B)  personal income tax.
C)  corporate income tax.
D)  excise tax.E) B) and C)
F) A) and B)

Exam 20: Taxation and the Public Budget

A tax in an efficient market:

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An example of a tax specifically designed to reduce consumption of a good is a tax on:

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Deficits and surpluses are commonly calculated as:

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A lump-sum tax is:

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The third largest source of government tax revenues that contributes roughly 10 percent to total revenues is:

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The surplus that is lost and not converted to tax revenue when a tax is imposed is:

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The difference between the loss of surplus to taxpayers and the tax revenue collected is called:

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A helpful way to put government revenues into context is to think about it:

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A bridge that typically gets 1,000 cars per day is installing a new toll next week of $.50 per car.The tax revenues generated will be:

Correct AnswerverifiedShow Answer

A flat tax:

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A tax on the wages paid to an employee is called the:

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The statutory incidence of a tax ______________ the economic incidence of the tax.

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The idea that people change their behavior in response to taxes is

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A tax that requires those with low incomes to pay a smaller percentage of their income than high-income earners is a:

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If Janice earns $50,000 a year and pays $500 in taxes,and Cam earns $100,000 a year and pays $20,000 in taxes,the tax system must be:

Correct AnswerverifiedShow Answer

A tax that is levied in such a way that low-income taxpayers pay a greater proportion of their income toward taxes than do high-income taxpayers is called a:

Correct AnswerverifiedShow Answer

If Bob earns $20,000 per year and Sue earns $100,000 a year,and there is a flat tax of 10 percent imposed,then Bob would pay __________,Sue would pay ___________,and this would be a __________ tax.

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Entitlement spending:

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A lump-sum tax:

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Deadweight loss as a result of taxation occurs because:

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If Bob earns $20,000 per year and Sue earns $100,000 a year,and there is a flat tax of 10 percent imposed,then Bob would pay ____,Sue would pay _,and this would be a ______ tax.

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