Micro Test #3
With a lump-sum tax, the average tax rate for high income tax payers will be
lower than the average tax rate for low income taxpayers
(Refer to Figure 10-11) Taking only private value and private cost into account, total surplus at the market equilibrium amounts to
$4,320
(Refer to Figure 9-5) Without trade, total surplus amounts to
$6,480
(Refer to Figure 9-1) In the absence of trade, the equilibrium price of coffee in Guatemala is
$90
Most Americans agree that our tax system should (i) be fair (ii) be efficient (iii) impose as small a cost on society as possible (iv) use a value added tax (VAT) instead of income tax
(i), (ii), and (iii) only
(Refer to Table 12-9) Bill is a single person whose taxable income is $35,000 a year. What is his average tax rate in 2012?
17.6%
(Refer to Figure 9-10) The are bounded by the points (Qo, Po), (Q2, P1), and (Q1, P1) represents
All of the above are correct
Which of the following statements is true both pollution permits and corrective taxes?
All of the above are correct
(Refer to Table 12-22) A lump-sum tax is illustrated by tax
D
A budget surplus occurs when government receipts fall short of government spending.
FALSE
According to the benefits principle, it is fair for people to pay taxes based on their ability to shoulder the tax burden.
FALSE
The tax on gasoline causes deadweight losses, as is the case with all taxes
FALSE
Tolls are not effective in altering people's incentives to drive during rush hour.
FALSE
Under the Principles of Guidelines for land and water related resource project planning, the U.S. Army Corps of Engineers develops the NED Plan that reasonably minimizes net national economic development benefits.
FALSE
The U.S. Army Corps of Engineers is a Federal Agency that has primary missions in the following three areas.
Flood Risk Management, Deep Draft Navigation, and Inland Navigation
(Refer to Figure 10-6) Which price represents the equilibrium price of the product in this market?
P
Import quotas and tariffs both cause the quantity of imports to fall.
TRUE
NAFTA is an example of a multilateral approach to achieving free trade.
TRUE
Some states do not have a state income tax
TRUE
The government can internalize externalities by taxing goods that have negative externalities and subsidizing goods that have positive externalities.
TRUE
When a driver enters a crowded highway he increases the travel times of all other drivers on the highway. This is an example of a negative externality.
TRUE
When free riders are present in a market, the market generally fails to provide the efficient outcome.
TRUE
Which of the following statements about the Coase theorem is true?
Underlying the results of the Coase theorem is the idea that private parties can bargain without cost over the allocations of resources.
An externality is an example of
a market failure
A tax levied on the total amount spent in retail stores is called
a sales tax
A patent is used to
assign property rights
As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because
benefits are hard to measure
Imagine a 2,000-acre park with picnic benches, tress, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking on summer afternoons. Otherwise, it is a great place. An efficient solution to the parking problem would be to
charge higher prices for parking at busy times.
The supply curve for a product reflects the
cost to sellers of producing the product
(Refer to Figure 9-20) With trade, Vietnam will
export 1,500 units of rice
A tax that is higher for men than for women violates the criterion of
horizontal equity
Horizontal equity in taxation refers to the idea that people
in equal conditions should pay equal taxes
The Tragedy of the Commons
is eliminated when property right are assigned to individuals
The value and cost of goods are easiest to determine when the goods are
private goods
One tax system is less efficient than another if it
raises the same amount of revenue at a higher cost to taxpayers
The greatest difficulty with cost-benefit analysis of a public project is determining
the value or benefit of the project
(Refer to Table 10-4) The table represents a market in which
there is a negative externality
An optimal tax is one that minimizes the
total deadweight loss from the tax
Trade enhances the economic well-being of a nation in the sense that
trade results in an increase in total surplus
In many cases the Coase theorem does not work well because
transaction costs are too high