Pre-Test Chap 17 e18 - Pre-Test Chap 17 e18 Student: _ 1....

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Pre-Test Chap 17 e18 Student: ___________________________________________________________________________ 1. The incidence of taxation refers to: A. Who in society actually pays the tax B. The structure of basic income tax rates C. Whether taxes are progressive or regressive D. Whether or not the benefits-received principle applies A supply and demand graph for a product on which an excise tax has been imposed by government. 2. Refer to the above graph. What is the area that represents the efficiency loss of the tax? A. XYT B. XYZ C. WXZU D. WXYZU 3. Which statement is correct? A. Given supply, the more inelastic the demand for the product, the larger the portion of the tax shifted forward to consumers B. Given supply, the more elastic the demand for the product, the larger the portion of the tax shifted forward to consumers C. Given demand, the more elastic the supply, the larger the portion of the tax borne by the producers D. Given demand, the more inelastic the supply, the larger the portion of the tax borne by consumers 4. The concept of limited choices, as used in public choice theory, refers to the fact that: A. Politicians may not be objective in evaluating economic policy programs B. Because of the importance of television and other modern communication techniques, the best and brightest candidates may not be selected by voters C. Voters must select a candidate who represents a "bundle" of various public policy programs and who can't register support or opposition for specific programs D. The most economically efficient public policy programs may not be selected because political leaders do not know enough about economics
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A supply and demand graph for a product on which an excise tax has been imposed by government. 5. Refer to the above graph. What is the area that represents the total tax burden (tax payment plus efficiency loss) for society from this excise tax? A. VWXT B. UWXYZ C. UWXZ D. XYZ 6. Refer to the above graph. The excise tax on this product as shown in the graph is ultimately paid: (use Q 2) A. 100 percent by consumers B. 100 percent by producers C. 75 percent by consumers and 25 percent by producers D. 50 percent by consumers and 50 percent by producers
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This note was uploaded on 05/23/2010 for the course ECON 101 taught by Professor Keep during the Spring '10 term at Glendale Community College.

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Pre-Test Chap 17 e18 - Pre-Test Chap 17 e18 Student: _ 1....

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