Question 1

Assume the supply curve for product X is perfectly elastic and that government imposes a $2-per-unit excise tax.We can conclude that the resulting:

Accepted Answer

A)   increase in output will be greater the less elastic the demand curve.
B)   decrease in output will be greater the less elastic the demand curve.
C)   decrease in output will be greater the more elastic the demand curve.
D)   increase in output will be greater the more elastic the demand curve.E) A) and D)
F) A) and C)

Question 2

The marginal tax rate is:

Accepted Answer

A)   the difference between the total tax rate and the average tax rate.
B)   the percentage of total income paid as taxes.
C)   change in taxes/change in taxable income.
D)   total taxes/total taxable income.E) A) and D)
F) A) and C)

Question 3

The more inelastic is demand and supply,the:

Accepted Answer

A)   larger is the efficiency loss of an excise tax.
B)   smaller is the efficiency loss of an excise tax.
C)   higher is the proportion of an excise tax paid by consumers.
D)   smaller is the proportion of an excise tax paid by producers.E) A) and B)
F) A) and C)

Question 4

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

Accepted Answer

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

Question 5

The marginal tax rate is the tax rate that applies to additional income.

Accepted Answer

A) True 
 B)False

Question 6

The greater the elasticity of supply of and demand for a good,the:

Accepted Answer

A)   smaller will be the efficiency loss of an excise tax on the good.
B)   more likely the good will be a public good rather than a private good.
C)   larger will be the efficiency loss of an excise tax on the good.
D)   larger will be the proportion of an excise tax on the good that will be shifted forward to consumers.E) A) and B)
F) A) and D)

Question 7

(Last Word) In 2004,approximately what percent of household income was transferred from the top two quintiles to the lowest three quintiles?

Accepted Answer

A)   Zero.
B)   10.
C)   15.
D)   22.E) A) and B)
F) A) and C)

Question 8

Given demand,the more inelastic the supply of a product,the larger the portion of an excise tax that is borne by producers.

Accepted Answer

A) True 
 B)False

Question 9

A highly progressive tax takes relatively more from the rich than it does from the poor.

Accepted Answer

A) True 
 B)False

Question 10

The major expenditure of local governments is for education.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not an important source of revenue for the federal government?

Accepted Answer

A)   Corporate income taxes.
B)   Property taxes.
C)   Payroll taxes.
D)   Personal income taxes.E) B) and D)
F) All of the above

Question 12

Which of the following is correct about the U.S.tax system?

Accepted Answer

A)   The primary federal tax system is regressive,while the primary state and local tax systems are progressive.
B)   Both the primary federal tax system and the primary state and local tax systems are regressive.
C)   The primary federal tax system is progressive,while the primary state and local tax systems are regressive.
D)   Both the primary federal tax system and the primary state and local tax systems are progressive.E) All of the above
F) A) and D)

Question 13

The maximum federal marginal tax rate on taxable personal income is,as of 2013:

Accepted Answer

A)   50 percent.
B)   39.6 percent.
C)   35 percent.
D)   28 percent.E) A) and B)
F) B) and D)

Question 14

If each taxpayer paid the same lump-sum amount regardless of income level,the tax system would be:

Accepted Answer

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

Question 15

(Consider This) Which of the following claims is not made by opponents of a value-added tax (VAT) ?

Accepted Answer

A)   Savings and investment is discouraged because future consumption is penalized.
B)   The VAT is regressive,potentially leading to additional progressive taxes to offset the regressive VAT.
C)   Sellers bear a disproportionately large burden of the tax.
D)   The VAT is a hidden tax,and thus easier to raise to support the expansion of government.E) A) and C)
F) A) and D)

Question 16

Answer the question on the basis of the following data:   Taxable Income  Total Tax $1,000$02,0001003,0003004,0006005,0001,0006,0001,500\begin{array} { c c } 	ext { Taxable Income } & 	ext { Total Tax } \\hline \$ 1,000 & \$ 0 \2,000 & 100 \3,000 & 300 \4,000 & 600 \5,000 & 1,000 \6,000 & 1,500\end{array} Taxable Income $1,0002,0003,0004,0005,0006,000​ Total Tax $01003006001,0001,500​​  Refer to the given data.If your taxable income is $4,000,your average tax rate will be:

Accepted Answer

A)   20 percent.
B)   15 percent.
C)   10 percent.
D)   5 percent. E) A) and B)
F) A) and C)

Question 17

With respect to local finance:

Accepted Answer

A)   death and gift taxes are the major source of revenue and most expenditures are for hospitals and health services.
B)   the corporate income tax is the major source of revenue and natural resource development is the major type of expenditure.
C)   property taxes are the basic source of revenue and education is the major type of expenditure.
D)   sales and excise taxes are the major source of revenue and highway construction and maintenance is the major type of expenditure.E) None of the above
F) A) and D)

Question 18

Approximately what percentage of state spending goes to finance education?

Accepted Answer

A)   36.
B)   44.
C)   47.
D)   53.E) None of the above
F) All of the above

Question 19

Currently (2013) the marginal tax rates of the federal personal income tax:

Accepted Answer

A)   are less than corresponding average tax rates.
B)   rise from 5 to 35 percent.
C)   fall from 20 to 10 percent.
D)   rise from 10 to 39.6 percent.E) B) and C)
F) B) and D)

Question 20

Which of the following is an exhaustive governmental outlay?

Accepted Answer

A)   A federal $5,000 subsidy check to an Illinois farmer.
B)   A Temporary Assistance to Needy Families payment made by the state of New York.
C)   A NASA payment to Boeing Corporation for space hardware.
D)   A federal old age insurance payment to a retired coal miner.E) C) and D)
F) B) and D)

Exam 19: Public Finance: Expenditures and Taxes

Assume the supply curve for product X is perfectly elastic and that government imposes a $2-per-unit excise tax.We can conclude that the resulting:

Correct Answer
verified

A highly progressive tax takes relatively more from the rich than it does from the poor.

Correct Answer
verified

The maximum federal marginal tax rate on taxable personal income is,as of 2013:

Correct Answer
verified

(Last Word) In 2004,approximately what percent of household income was transferred from the top two quintiles to the lowest three quintiles?

Correct Answer
verified

Which of the following is not an important source of revenue for the federal government?

Correct Answer
verified

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

Correct Answer
verified

The major expenditure of local governments is for education.

Correct Answer
verified

Which of the following is an exhaustive governmental outlay?

Correct Answer
verified

The marginal tax rate is:

Correct Answer
verified

The marginal tax rate is the tax rate that applies to additional income.

Correct Answer
verified

The more inelastic is demand and supply,the:

Correct Answer
verified

(Consider This) Which of the following claims is not made by opponents of a value-added tax (VAT) ?

Correct Answer
verified

The greater the elasticity of supply of and demand for a good,the:

Correct Answer
verified

Currently (2013) the marginal tax rates of the federal personal income tax:

Correct Answer
verified

Which of the following is correct about the U.S.tax system?

Correct Answer
verified

With respect to local finance:

Correct Answer
verified

Given demand,the more inelastic the supply of a product,the larger the portion of an excise tax that is borne by producers.

Correct Answer
verified

Correct Answer
verified

Approximately what percentage of state spending goes to finance education?

Correct Answer
verified

If each taxpayer paid the same lump-sum amount regardless of income level,the tax system would be:

Correct Answer
verified

Exam 19: Public Finance: Expenditures and Taxes

Assume the supply curve for product X is perfectly elastic and that government imposes a $2-per-unit excise tax.We can conclude that the resulting:

Correct AnswerverifiedShow Answer

A highly progressive tax takes relatively more from the rich than it does from the poor.

Correct AnswerverifiedShow Answer

The maximum federal marginal tax rate on taxable personal income is,as of 2013:

Correct AnswerverifiedShow Answer

(Last Word) In 2004,approximately what percent of household income was transferred from the top two quintiles to the lowest three quintiles?

Correct AnswerverifiedShow Answer

Which of the following is not an important source of revenue for the federal government?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The major expenditure of local governments is for education.

Correct AnswerverifiedShow Answer

Which of the following is an exhaustive governmental outlay?

Correct AnswerverifiedShow Answer

The marginal tax rate is:

Correct AnswerverifiedShow Answer

The marginal tax rate is the tax rate that applies to additional income.

Correct AnswerverifiedShow Answer

The more inelastic is demand and supply,the:

Correct AnswerverifiedShow Answer

(Consider This) Which of the following claims is not made by opponents of a value-added tax (VAT) ?

Correct AnswerverifiedShow Answer

The greater the elasticity of supply of and demand for a good,the:

Correct AnswerverifiedShow Answer

Currently (2013) the marginal tax rates of the federal personal income tax:

Correct AnswerverifiedShow Answer

Which of the following is correct about the U.S.tax system?

Correct AnswerverifiedShow Answer

With respect to local finance:

Correct AnswerverifiedShow Answer

Given demand,the more inelastic the supply of a product,the larger the portion of an excise tax that is borne by producers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Approximately what percentage of state spending goes to finance education?

Correct AnswerverifiedShow Answer

If each taxpayer paid the same lump-sum amount regardless of income level,the tax system would be:

Correct AnswerverifiedShow Answer

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