Question 1

Table 12-25
 
-Refer to Table 12-25. Which plan illustrates a proportional tax?

Accepted Answer

Plan B illustrates a proportio...

Question 2

Tax incidence refers to

Accepted Answer

A)   what product or service the tax is levied on.
B)   who bears the tax burden.
C)   what sector of the economy is most affected by the tax.
D)   the dollar value of the tax revenues.E) None of the above
F) A) and B)

Question 3

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) None of the above
F) B) and C)

Question 4

A tax levied on the total amount spent in retail stores is called

Accepted Answer

A)   a sales tax.
B)   an excise tax.
C)   a retail tax.
D)   an income tax.E) A) and B)
F) A) and C)

Question 5

As a person's or family's income rises, the marginal federal income tax rate .

Accepted Answer

The answer of As a person's or family's income rises,...

Question 6

Scenario 12-1
Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15.
-Refer to Scenario 12-1. Suppose the government levies a tax of $3 on each cigar, and the equilibrium price of a cigar increases to $18. What is total consumer surplus after the tax is levied?

Accepted Answer

A)   $0
B)   $2
C)   $5
D)   $6E) C) and D)
F) B) and C)

Question 7

The typical state spends the most on

Accepted Answer

A)   education.
B)   Medicare and Social Security.
C)   highways.
D)   defense.E) A) and B)
F) A) and D)

Question 8

A tax imposed at every stage of production is a

Accepted Answer

A)   value-added tax.
B)   lump sum tax.
C)   corrective tax.
D)   regressive tax.E) All of the above
F) B) and C)

Question 9

Deadweight losses represent the

Accepted Answer

A)   inefficiency that taxes create.
B)   shift in benefit from producers to consumers.
C)   part of consumer and producer surplus that is now revenue to the government.
D)   increase in revenue to the government.E) A) and D)
F) A) and C)

Question 10

Of the following countries, which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Accepted Answer

A)   Denmark
B)   United States
C)   Canada
D)   GreeceE) None of the above
F) C) and D)

Question 11

A lump-sum tax

Accepted Answer

A)   is most frequently used to tax real property.
B)   does not distort incentives.
C)   distorts incentives more than any other type of tax.
D)   is the most fair tax.E) A) and B)
F) B) and D)

Question 12

One characteristic of an efficient tax system is that it minimizes the costs associated with revenue collection.

Accepted Answer

A) True 
 B)False

Question 13

A lump-sum tax minimizes deadweight loss.

Accepted Answer

A) True 
 B)False

Question 14

One reason for the projected increase, over the next several decades, in government spending as a percentage of GDP is the projected increase in the size of the elderly population.

Accepted Answer

A) True 
 B)False

Question 15

The marginal tax rate serves as a measure of the extent to which the tax system discourages people from working.

Accepted Answer

A) True 
 B)False

Question 16

An advantage of a consumption tax over the present tax system is that a consumption tax

Accepted Answer

A)   raises more revenues.
B)   would save the government millions in administrative costs.
C)   places more of the tax burden on the wealthy.
D)   does not discourage saving.E) C) and D)
F) None of the above

Question 17

The benefits principle is used to justify

Accepted Answer

A)   sales taxes.
B)   gasoline taxes.
C)   "sin" taxes on cigarettes and alcoholic beverages.
D)   personal income taxes.E) A) and B)
F) A) and C)

Question 18

Suppose the government taxes 30 percent of the first $70,000 and 50 percent of all income above $70,000. For a person earning $100,000, the marginal tax rate is

Accepted Answer

A)   30 percent, and the average tax rate is 50 percent.
B)   30 percent, and the average tax rate is 36 percent.
C)   50 percent, and the average tax rate is 40 percent.
D)   50 percent, and the average tax rate is 36 percent.E) B) and C)
F) All of the above

Question 19

One tax system is less efficient than another if it

Accepted Answer

A)   places a lower tax burden on lower-income families than on higher-income families.
B)   places a higher tax burden on lower-income families than on higher-income families.
C)   raises the same amount of revenue at a higher cost to taxpayers.
D)   raises less revenue at a lower cost to taxpayers.E) None of the above
F) B) and C)

Question 20

The U.S. tax burden is

Accepted Answer

A)   about the same as most European countries.
B)   higher than most European countries.
C)   lower than most European countries.
D)   higher than all European countries.E) None of the above
F) A) and B)

Exam 12: The Design of the Tax System

A tax imposed at every stage of production is a

Correct Answer
verified

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

Correct Answer
verified

Suppose the government taxes 30 percent of the first $70,000 and 50 percent of all income above $70,000. For a person earning $100,000, the marginal tax rate is

Correct Answer
verified

As a person's or family's income rises, the marginal federal income tax rate .

Correct Answer
verified

The marginal tax rate serves as a measure of the extent to which the tax system discourages people from working.

Correct Answer
verified

Of the following countries, which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Correct Answer
verified

Tax incidence refers to

Correct Answer
verified

Correct Answer
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The U.S. tax burden is

Correct Answer
verified

Deadweight losses represent the

Correct Answer
verified

One reason for the projected increase, over the next several decades, in government spending as a percentage of GDP is the projected increase in the size of the elderly population.

Correct Answer
verified

An advantage of a consumption tax over the present tax system is that a consumption tax

Correct Answer
verified

One characteristic of an efficient tax system is that it minimizes the costs associated with revenue collection.

Correct Answer
verified

A tax levied on the total amount spent in retail stores is called

Correct Answer
verified

A lump-sum tax

Correct Answer
verified

A lump-sum tax minimizes deadweight loss.

Correct Answer
verified

One tax system is less efficient than another if it

Correct Answer
verified

The typical state spends the most on

Correct Answer
verified

Table 12-25 -Refer to Table 12-25. Which plan illustrates a proportional tax?

Correct Answer
verified
Plan B illustrates a proportio...
View Answer

The benefits principle is used to justify

Correct Answer
verified

Exam 12: The Design of the Tax System

A tax imposed at every stage of production is a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Suppose the government taxes 30 percent of the first $70,000 and 50 percent of all income above $70,000. For a person earning $100,000, the marginal tax rate is

Correct AnswerverifiedShow Answer

As a person's or family's income rises, the marginal federal income tax rate .

Correct AnswerverifiedShow Answer

The marginal tax rate serves as a measure of the extent to which the tax system discourages people from working.

Correct AnswerverifiedShow Answer

Of the following countries, which country's government collects the largest amount of tax revenue as a percentage of that country's total income?

Correct AnswerverifiedShow Answer

Tax incidence refers to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The U.S. tax burden is

Correct AnswerverifiedShow Answer

Deadweight losses represent the

Correct AnswerverifiedShow Answer

One reason for the projected increase, over the next several decades, in government spending as a percentage of GDP is the projected increase in the size of the elderly population.

Correct AnswerverifiedShow Answer

An advantage of a consumption tax over the present tax system is that a consumption tax

Correct AnswerverifiedShow Answer

One characteristic of an efficient tax system is that it minimizes the costs associated with revenue collection.

Correct AnswerverifiedShow Answer

A tax levied on the total amount spent in retail stores is called

Correct AnswerverifiedShow Answer

A lump-sum tax

Correct AnswerverifiedShow Answer

A lump-sum tax minimizes deadweight loss.

Correct AnswerverifiedShow Answer

One tax system is less efficient than another if it

Correct AnswerverifiedShow Answer

The typical state spends the most on

Correct AnswerverifiedShow Answer

Table 12-25 -Refer to Table 12-25. Which plan illustrates a proportional tax?

Correct AnswerverifiedPlan B illustrates a proportio...View AnswerShow Answer

The benefits principle is used to justify

Correct AnswerverifiedShow Answer

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Plan B illustrates a proportio...
View Answer

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