Question 1

An example of a tax-funded program intended to provide basic human needs is the provision of:

Accepted Answer

A)   public education.
B)   police protection.
C)   health care.
D)   national defense.E) A) and B)
F) A) and C)

Question 2

The side of the market that is more inelastic:

Accepted Answer

A)   will bear more of the tax burden.
B)   will bear less of the tax burden.
C)   will share an equal amount of the tax burden.
D)   determines whether to shoulder the majority of the tax burden or pass it on.E) B) and C)
F) B) and D)

Question 3

The total amount of surplus lost due to taxation is:

Accepted Answer

A)   greater than the amount of revenue generated.
B)   less than the amount of revenue generated.
C)   transferred to the government in the form of tax revenues.
D)   used to fund public services.E) A) and B)
F) C) and D)

Question 4

For a person earning $15,000,the marginal tax amount from 10,001 to $15,000 is:

Accepted Answer

A)   $500
B)   $750
C)   $1,750
D)   $2,000E) A) and B)
F) B) and C)

Question 5

A public expenditure that has to be approved each year is called:

Accepted Answer

A)   discretionary spending.
B)   nondiscretionary spending.
C)   entitlement spending.
D)   earmarked spending.E) A) and B)
F) None of the above

Question 6

1 to D2.The distance AC in the graph shown represents all of the following except the: A)  amount of the tax. B)  difference between what the consumer pays and what the seller receives. C)   tax wedge.  D)  total tax revenue generated for the government by imposing the tax." class="answers-bank-image d-inline" rel="preload" > This graph depicts a tax being imposed,causing demand to shift from D1 to D2.The distance AC in the graph shown represents all of the following except the:

Accepted Answer

A)   amount of the tax.
B)   difference between what the consumer pays and what the seller receives.
C)   "tax wedge."
D)   total tax revenue generated for the government by imposing the tax.E) None of the above
F) A) and C)

Question 7

Considering a given increase in price due to a tax,the more price elastic the supply curve is,the:

Accepted Answer

A)   larger the drop in equilibrium quantity.
B)   smaller the drop in equilibrium quantity.
C)   smaller the amount of deadweight loss created.
D)   less surplus that is transferred to consumers.E) A) and B)
F) C) and D)

Question 8

Which of the following is not one of the general classifications of taxes?

Accepted Answer

A)   Regressive.
B)   Progressive.
C)   Proportional.
D)   Gradual.E) All of the above
F) None of the above

Question 9

Raising taxes:

Accepted Answer

A)   always raises tax revenues.
B)   always decreases tax revenues.
C)   can sometimes decrease tax revenues.
D)   None of these statements is true.E) All of the above
F) B) and C)

Question 10

In general,the most efficient taxes:

Accepted Answer

A)   are often not the most equitable.
B)   are often the most equitable.
C)   raise the most revenues.
D)   do not raise the most revenues.E) C) and D)
F) B) and C)

Question 11

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

Question 12

If the federal government brings in $1.1 trillion in tax revenues and spends $0.7 trillion,the government has a budget:

Accepted Answer

A)   deficit of $0.4 trillion.
B)   surplus of $0.4 trillion.
C)   deficit of $1.8 trillion.
D)   surplus of $1.1 trillion.E) All of the above
F) C) and D)

Question 13

The burden a tax places on buyers versus sellers is:

Accepted Answer

A)   independent of which side is charged the tax.
B)   always split in half.
C)   never shared.
D)   depends on which side is charged with the tax.E) A) and D)
F) A) and C)

Question 14

Deadweight loss is minimized when a tax is levied on something for which people:

Accepted Answer

A)   are not likely to change their behavior much in response to a price change.
B)   are very likely to change their behavior in response to a price change.
C)   have a large income elasticity of demand.
D)   have a small income elasticity of demand.E) A) and B)
F) C) and D)

Question 15

A tax that takes the same percentage of tax from all taxpayers is called a:

Accepted Answer

A)   proportional tax.
B)   progressive tax.
C)   regressive tax.
D)   lump-sum tax.E) None of the above
F) B) and C)

Question 16

1 to D2.The deadweight loss associated with the tax imposed in the graph shown is: A)  equal to area CBD. B)  equal to area ABC. C)  due to the decrease in consumption from Q1 to Q2. D)  equal to area P1DCP2." class="answers-bank-image d-inline" rel="preload" > This graph depicts a tax being imposed,causing demand to shift from D1 to D2.The deadweight loss associated with the tax imposed in the graph shown is:

Accepted Answer

A)   equal to area CBD.
B)   equal to area ABC.
C)   due to the decrease in consumption from Q1 to Q2.
D)   equal to area P1DCP2.E) B) and D)
F) All of the above

Question 17

The logistical costs associated with implementing a tax are called the:

Accepted Answer

A)   deadweight loss.
B)   administrative burden.
C)   total surplus.
D)   tax revenue.E) A) and B)
F) A) and C)

Question 18

A lump-sum tax is:

Accepted Answer

A)   a head tax.
B)   the most efficient form of taxation.
C)   a tax that charges the same amount to each taxpayer.
D)   All of these statements are true.E) B) and D)
F) B) and C)

Question 19

An example of a tax-funded program primarily intended to stimulate economic growth is the:

Accepted Answer

A)   maintenance of public highways.
B)   provision of housing to those in need.
C)   provision of basic healthcare.
D)   provision of national defense.E) A) and B)
F) A) and C)

Question 20

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,then Janice's effective tax rate is _____ and Cam's effective tax rate is____.

Accepted Answer

A)   2%, 20%.
B)   5%, 20%.
C)   5%, 10%.
D)   10%, 10%.E) A) and D)
F) C) and D)

Exam 20: Taxation and the Public Budget

Considering a given increase in price due to a tax,the more price elastic the supply curve is,the:

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The side of the market that is more inelastic:

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A tax that takes the same percentage of tax from all taxpayers is called a:

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An example of a tax-funded program intended to provide basic human needs is the provision of:

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The burden a tax places on buyers versus sellers is:

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Which of the following is not one of the general classifications of taxes?

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This graph depicts a tax being imposed,causing demand to shift from D1 to D2.The deadweight loss associated with the tax imposed in the graph shown is:

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For a person earning $15,000,the marginal tax amount from 10,001 to $15,000 is:

Correct AnswerverifiedShow Answer

The total amount of surplus lost due to taxation is:

Correct AnswerverifiedShow Answer

An example of a tax-funded program primarily intended to stimulate economic growth is the:

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If the federal government brings in $1.1 trillion in tax revenues and spends $0.7 trillion,the government has a budget:

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

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A public expenditure that has to be approved each year is called:

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Deadweight loss is minimized when a tax is levied on something for which people:

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The logistical costs associated with implementing a tax are called the:

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Raising taxes:

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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,then Janice's effective tax rate is _____ and Cam's effective tax rate is____.

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A lump-sum tax is:

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In general,the most efficient taxes:

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This graph depicts a tax being imposed,causing demand to shift from D1 to D2.The distance AC in the graph shown represents all of the following except the:

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This graph depicts a tax being imposed,causing demand to shift from D₁ to D₂.The deadweight loss associated with the tax imposed in the graph shown is:

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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,then Janice's effective tax rate is _ and Cam's effective tax rate is.

Correct Answer
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This graph depicts a tax being imposed,causing demand to shift from D₁ to D₂.The distance AC in the graph shown represents all of the following except the:

Correct Answer
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