chapter 7 - Name: _ Date: _ 1. If the government imposes a...

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Name: __________________________ Date: _____________ 1. If the government imposes a $5 excise tax on the sale of leather shoes collected from the supplier and the price of leather shoes increases by $2,: A) the government will receive less tax revenue than anticipated. B) consumers are paying more of the tax than the producers. C) producers are paying more of the tax than are the consumers. D) the quantity of shoes sold will increase. Use the following to answer question 2: 2. (Table: Three Tax Structure Proposals) Policy makers interested in implementing a progressive tax structure would suggest using: A) Proposal 1. B) Proposal 2. C) Proposal 3. D) all of the proposals, since all are progressive. Page 1
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Use the following to answer question 3: Figure: Market for Blue Jeans 3. (Figure: Market for Blue Jeans) The government recently levied a $10 tax on the producers of blue jeans. Using the graph, identify the area(s) that represent the loss of consumer surplus due to the tax. A) c B) b + c C) b D) a + b + c 4. If an excise tax is imposed on beer and collected from the producers, the ________ curve will shift ________ by the amount of the tax. A) demand; upward B) demand; downward C) supply; upward D) supply; downward 5. Criteria that economists use in selecting a tax system include: A) ability to pay and benefits received. B) fairness. C) only benefits received. Page 2
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D) only ability to pay. 6. In Eastlandia, personal income up to and including $25,000 is not taxed, income greater than $25,000 and less than or equal to $50,000 is taxed at a rate of 10%, and income over $50,000 is taxed at a rate of 20%. A family earning income equal to $75,000 in Eastlandia will pay ________ in personal taxes. A)
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This note was uploaded on 02/18/2012 for the course ECON 102 taught by Professor Kim during the Fall '08 term at University of Illinois, Urbana Champaign.

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chapter 7 - Name: _ Date: _ 1. If the government imposes a...

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