Question 1

Which of the following is an example of an excise tax?

Accepted Answer

A)   a tax on the wages that a firm pays its workers
B)   a tax on tobacco
C)   a tax on corporate profits
D)   the portion of federal income taxes earmarked to pay for Social Security and MedicareE) B) and C)
F) All of the above

Question 2

Because the marginal tax rate rises as income rises,

Accepted Answer

A)   higher income families, in general, pay a larger percentage of their income in taxes.
B)   lower income families, in general, pay a larger percentage of their income in taxes.
C)   a disproportionately large share of the tax burden falls upon the poor.
D)   higher income families pay the same percentage of their income in taxes as lower-income families.E) A) and D)
F) A) and C)

Question 3

Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice,$9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. Assume that the government places a $4 tax on each slice of cheesecake and that the new equilibrium price is $9. Which of the following statements is correct?

Accepted Answer

A)   Roger will bear the full burden of the deadweight loss.
B)   Regina will bear the full burden of the deadweight loss.
C)   Both Regina and Roger will share the burden of the deadweight loss.
D)   There will be no deadweight loss.E) B) and D)
F) None of the above

Question 4

A budget deficit occurs when government receipts exceed government spending.

Accepted Answer

A) True 
 B)False

Question 5

Table 12-20
The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown.
 
-Refer to Table 12-20. Which tax schedules are regressive?

Accepted Answer

A)   Tax Schedule A and Tax Schedule B
B)   Tax Schedule B and Tax Schedule C
C)   Tax Schedule C and Tax Schedule D
D)   None of the Tax Schedules are regressive.E) B) and C)
F) C) and D)

Question 6

Table 12-1
 
-Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. The deadweight loss associated with the tax is

Accepted Answer

A)   $5.
B)   $12.
C)   $36.
D)   $41.E) A) and D)
F) A) and B)

Question 7

The federal taxes owed by a taxpayer depend

Accepted Answer

A)   only upon the marginal tax rate on the taxpayer's first $25,000 of income.
B)   only upon the marginal tax rate on the taxpayer's last $10,000 of income.
C)   upon all the marginal tax rates up to the taxpayer's overall level of income.
D)   upon all the marginal tax rates, including those for income levels that exceed the taxpayer's overall level of income.E) None of the above
F) A) and B)

Question 8

If your income is $40,000 and your income tax liability is $5,000, your

Accepted Answer

A)   marginal tax rate is 8 percent.
B)   average tax rate is 8 percent.
C)   marginal tax rate is 12.5 percent.
D)   average tax rate is 12.5 percent.E) C) and D)
F) B) and D)

Question 9

Table 12-4
 
-Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Accepted Answer

A)   30%
B)   40%
C)   50%
D)   60%E) A) and C)
F) B) and C)

Question 10

A tax that is higher for men than for women violates the criterion of

Accepted Answer

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

Question 11

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1)  a person with no income would pay no taxes, and 2)  a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following statements is correct?

Accepted Answer

A)   A lump-sum tax would achieve the second goal but not the first.
B)   A regressive tax would achieve the second goal but not the first.
C)   A progressive tax could achieve both goals.
D)   A proportional tax could achieve the second goal but not the first.E) All of the above
F) None of the above

Question 12

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Accepted Answer

A)   Canada
B)   Germany
C)   Sweden
D)   MexicoE) None of the above
F) All of the above

Question 13

Suppose the government levies a "fat tax" on naturally­sweetened carbonated beverages to try to reduce the number of overweight children. If the tax revenues pay for the health problems of overweight children, the tax would satisfy the

Accepted Answer

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

Question 14

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1)  two people with the same total income would pay taxes of the same amount, and 2)  a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following tax systems could achieve both goals?

Accepted Answer

A)   a lump-sum tax
B)   a regressive tax
C)   a progressive tax
D)   a proportional taxE) C) and D)
F) B) and D)

Question 15

Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
 
-Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2012?

Accepted Answer

A)   10%
B)   15%
C)   12.5%
D)   28%E) A) and D)
F) B) and C)

Question 16

List several examples of the administrative burden of the U.S. income tax system.

Accepted Answer

time spent filling out tax for...

Question 17

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Accepted Answer

A)   10 percent
B)   20 percent
C)   30 percent
D)   50 percentE) B) and C)
F) All of the above

Question 18

Deadweight losses are associated with

Accepted Answer

A)   taxes that distort the incentives that people face.
B)   taxes that target expenditures on survivor's benefits for Social Security.
C)   taxes that have no efficiency losses.
D)   lump-sum taxes.E) C) and D)
F) A) and D)

Question 19

Scenario 12-3
Suppose Roger and Regina receive great satisfaction from their consumption of cheesecake. Regina would be willing to purchase only one slice and would pay up to $8 for it. Roger would be willing to pay $11 for his first slice,$9 for his second slice, and $5 for his third slice. The current market price is $5 per slice.
-Refer to Scenario 12-3. How much total consumer surplus do Regina and Roger collectively receive from consuming cheesecake?

Accepted Answer

A)   $3
B)   $6
C)   $9
D)   $13E) A) and B)
F) A) and C)

Question 20

Government spending is projected to rise over the next few decades. Three of the most important reasons are spending on Social Security, Medicare, and healthcare.

Accepted Answer

A) True 
 B)False

Exam 12: The Design of the Tax System

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Correct Answer
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Correct Answer
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A tax that is higher for men than for women violates the criterion of

Correct Answer
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Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2012?

Correct Answer
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You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) a person with no income would pay no taxes, and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following statements is correct?

Correct Answer
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Correct Answer
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Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Correct Answer
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Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Correct Answer
verified

Because the marginal tax rate rises as income rises,

Correct Answer
verified

Correct Answer
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Government spending is projected to rise over the next few decades. Three of the most important reasons are spending on Social Security, Medicare, and healthcare.

Correct Answer
verified

The federal taxes owed by a taxpayer depend

Correct Answer
verified

Suppose the government levies a "fat tax" on naturallysweetened carbonated beverages to try to reduce the number of overweight children. If the tax revenues pay for the health problems of overweight children, the tax would satisfy the

Correct Answer
verified

Correct Answer
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Which of the following is an example of an excise tax?

Correct Answer
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If your income is $40,000 and your income tax liability is $5,000, your

Correct Answer
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A budget deficit occurs when government receipts exceed government spending.

Correct Answer
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List several examples of the administrative burden of the U.S. income tax system.

Correct Answer
verified
time spent filling out tax for...
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Table 12-20 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-20. Which tax schedules are regressive?

Correct Answer
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Deadweight losses are associated with

Correct Answer
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Exam 12: The Design of the Tax System

Table 12-4 -Refer to Table 12-4. What is the marginal tax rate for a person who makes $130,000?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A tax that is higher for men than for women violates the criterion of

Correct AnswerverifiedShow Answer

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Jake is a single person whose taxable income is $20,000 a year. What is his average tax rate in 2012?

Correct AnswerverifiedShow Answer

You are trying to design a tax system that will simultaneously achieve both of the following goals: 1) a person with no income would pay no taxes, and 2) a high-income person would pay a higher fraction of income in taxes than a low-income person. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose the government imposes a tax of 20 percent on the first $50,000 of income and 30 percent on all income above $50,000. What is the marginal tax rate when income is $60,000?

Correct AnswerverifiedShow Answer

Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?

Correct AnswerverifiedShow Answer

Because the marginal tax rate rises as income rises,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Government spending is projected to rise over the next few decades. Three of the most important reasons are spending on Social Security, Medicare, and healthcare.

Correct AnswerverifiedShow Answer

The federal taxes owed by a taxpayer depend

Correct AnswerverifiedShow Answer

Suppose the government levies a "fat tax" on naturally­sweetened carbonated beverages to try to reduce the number of overweight children. If the tax revenues pay for the health problems of overweight children, the tax would satisfy the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of an excise tax?

Correct AnswerverifiedShow Answer

If your income is $40,000 and your income tax liability is $5,000, your

Correct AnswerverifiedShow Answer

A budget deficit occurs when government receipts exceed government spending.

Correct AnswerverifiedShow Answer

List several examples of the administrative burden of the U.S. income tax system.

Correct Answerverifiedtime spent filling out tax for...View AnswerShow Answer

Table 12-20 The following table presents the total tax liability for an unmarried taxpayer under four different tax schedules for the income levels shown. -Refer to Table 12-20. Which tax schedules are regressive?

Correct AnswerverifiedShow Answer

Deadweight losses are associated with

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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Correct Answer
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Correct Answer
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Correct Answer
verified

Suppose the government levies a "fat tax" on naturallysweetened carbonated beverages to try to reduce the number of overweight children. If the tax revenues pay for the health problems of overweight children, the tax would satisfy the

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
time spent filling out tax for...
View Answer

Correct Answer
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Correct Answer
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