SCAN0809_000 - Chapter Seven 1. to Name: Date: An excise...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter Seven 1. to Name: Date: An excise tax collected from the producers of a good: A) shifts the supply curve upward. B) creates a loss of revenue for the government. C) has a similar effect as a tax subsidy. D) shifts the supply curve downward. . Recently, the government considered adding an excise tax on CDs that can be used to record music and CD players that can record discs. If this tax was enacted, we would expect: A) that consumers would pay a higher price and producers would sell fewer of these CDs and CD players than before the tax. there to be no effect on consumption or the prices paid by consumers of these CDs and CD players. that consumers would pay a lower price and producers wouid receive a higher price for these CDs and CD players than before the tax. there to be an increase in economic activity due to the tax. B) C) D) . If an excise tax is imposed on automobiles and collected from consumers,: A) the demand curve will shift downward by the amount of the tax. B) the supply curve will shift upward by the amount of the tax. C) the equilibrium quantity supplied will increase relative to the pre~tax level. D) the equilibrium quantity demanded will increase relative to the pro-tax level. The incidence of a tax: A) is a measure of the revenue the government receives from the tax. B) refers to who writes the check to the government. C) refers to who in reality pays the tax to the government. D) is a measure of the deadweight loss from the tax. . An excise tax creates inefficiency in that the number of transactions in a market is reduced. Because the tax discourages mutually beneficial transactions, there is from a tax. A) quota rent B) deadweight loss C) excess burden D) both deadweight loss and excess burden State governments place excise taxes on cigarettes because: A) they want to subsidize tobacco fanning. B) they want to discourage cigarette smuggling. C) it is an easy way to raise tax revenue while discouraging smoking. D) they want to reduce deadweight loss. Chapter Seven Page I 7. As part of an anti—obesity program, the government places an excise tax on highufat foods. We would expect consumers to pay almost all of this tax if demand is: 10. 11. 12. A) B) C) D) inelastic and supply is inelastic. inelastic and supply is elastic. elastic and supply is elastic. elastic and supply is inelastic. . The burden of a tax that is imposed on a good is said to fall completely on the consumers if the: A) B) C) D) price paid by consumers for the good declines by the amount of the tax. price paid by consumers for the good increases by the amount of the tax. price paid by consumers does not change. wages received by workers who produce the good increase by the amount of the tax. The burden of a tax that is imposed on a good is said to fall compietely on the producers if the: A) B) C) D) price paid by consumers for the good declines by the amount of the tax. price paid by consumers for the good increases by the amount of the tax. price paid by consumers does not change. wages received by workers who produce the good increase by the amount of the tax. Considering demand only, a tax on which of the following goods would result in a larger deadweight loss? A) B) C) D) gasoiine medicine restaurant meals tobacco If the government decides to place a $700 tax on U.S. citizens traveling abroad, then the deadweight loss from this tax will be: A) B) C) D) relatively small. relatively large. zero. absorbed by foreign governments. The 1990 “yacht tax” caused a large deadweight loss, because demand for luxury yachts made in the United States is: A) B) C) D) very elastic. very inelastic. perfectly inelastic since “rich” people wil} pay whatever is necessary. perfectly elastic. Chapter Seven Page 2 13. 14. 15. 16. 17. 18. 19. When the government imposes an excise tax in a market: A) consumer surplus falls. B) producer surplus falls. C) a deadweight loss is created. D) All of the above. A higher tax rate is more likely to increase tax revenue collected if the price elasticity of: A) demand and supply are both high. B) demand and supply are both low. C) demand is low, but the price elasticity of supply is high. D) demand is high, but the price elasticity of supply is low. A tax system achieves tax equity when: A) the “right” people actually hear the burden of taxes. B) it minimizes the costs to the economy of tax collection. C) taxes are efficient. D) everyone pays the same amount of tax. A tax system achieves tax efficiency when: A) the “right” people actually hear the burden of taxes. B) it minimizes the costs to the economy of tax collection. C) the tax is fair. D) it is in equilibrium. The two principles of tax fairness are: A) the minimize—distortions principle and the maximize-revenue principle. B) the benefits principle and the ability-to-pay principle. C) the proportional-tax principle and the ability—to-pay principle. D) the equity principle and the efficiency principle. The ability—to—pay principle says that: A) the amount of tax paid depends on the measure of value. B) those that benefit from public spending should bear the burden of the tax that pays for that spending. those with greater ability to pay should pay more tax. those that benefit from the tax should pay the same percentage of the tax base as those who do not benefit. C) D) Which of the following situations provides an example of the benefits principle? A) Employed workers pay taxes that are used to fund technical training programs. B) Revenue from the federal tax on gasoline is used to maintain and improve the interstate highway system. Most of the revenue from property taxes is used to fund public schools. The taxes are paid by all homeowners. Taxes on cigarettes are used to pay state employees' salaries. C) D) Chapter Seven Page 3 20. 22. 23. 24. 25. The benefits principle says that: A) the amount of tax paid depends on the measure of value. B) those that benefit from pubiic spending should bear the burden of the tax that pays for that spending. those with greater ability to pay should pay more tax. those that benefit from the tax should pay the same percentage of the tax base as those who do not benefit. C) D) . Which of the following taxes reflects the ability-to-pay principle? A) the federal income tax B) the payroll tax C) a sales tax on food D) Social Security tax Paying a fee every time you use the municipal golfcourse is an example of the: A) benefits principle. B) ability-to—pay principle. C) progressive tax principle. D) regressive tax principle. share of total The richest 20% of families in the United States pay a much share of total payroll taxes than their share of income taxes collected and a total income. A) higher; lower B) lower; higher C) higher; higher D) lower; lower The poorest 20% of families in the United States pay a share of their total income in taxes. A) very large B) somewhat large C) small D) negative According to the , those who benefit from public spending should bear the burden of the tax that pays for the spending. A) ahility-to~pay principle B) tax fairness principie C) benefits principle D) spending principle Chapter Seven Page 4 27. 28. 29. 30. 31. 32. . Brianna and Jess live in Taxland, which only has one tax, an income tax. Both Brianna and Jess pay $1,000 in taxes each year but Brianna earns $20,000 and Jess earns $10,000. From this information, you can infer that the tax system is: A) progressive. B) regressive. C) prop01tional. D) equitable. The two most important sources of federal tax revenue are the: A) payroll and income taxes. B) corporate income and payroll taxes. C) excise and income taxes. D) Sociai Security and excise taxes. The amount of tax people are required to pay per unit of whatever good or service is being taxed is called the: A) tax incidence. B) tax rate. C) tax revenue. D) tax surplus. Suppose an income tax taxes 0% of the first $1,000, 10% of the next $10,000, and 20% of the remainder of earnings. This type of tax can be described as: A) progressive. B) proportional. C) regressive. D) equitable. A tax that rises less than in proportion to income is described as: A) progressive. B) proportional. C) regressive. D) structural. A progressive tax: A) takes a larger share of the income of high-income taxpayers than of low-income taxpayers. takes a smaller share of the income of high—income taxpayers than of low—income taxpayers. takes the same share of the income of highnincome taxpayers as it does of low- income taxpayers. has no deadweight loss. B) C) D) Taxes paid on the purchase of most consumption goods wouid fail into the category of: A) income tax. B) property tax. C) sales tax. D) wealth tax. Chapter Seven Page 5 33. The percentage of an increase in income that is taxed away by a taxpayer is the: A) marginal tax rate. B) average tax rate. C) total tax rate. D) lower tax rate. 34. Payroll taxes are considered to be: A) proportional. B) progressive. C) degressive. D) regressive. 35. The evidence in the US. economy suggests that, taken collectively, federal taxes in the economy are: A) regressive. B) quite progressive. C) slightly progressive. D) proportional. 36. A regressive tax is one that takes a: A) fixed percentage of income. B) lower percentage of income as income rises. C) higher percentage of income as income rises. D) higher percentage of income as income fails. Chapter Seven Page 6 ...
View Full Document

This note was uploaded on 02/03/2012 for the course ECONOMICS 202 taught by Professor Black during the Spring '08 term at Boise State.

Page1 / 6

SCAN0809_000 - Chapter Seven 1. to Name: Date: An excise...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online