Econ Ch 10

Economies with lower taxes encourage production and increase available social surplus. One possible cost of such economies is that the gap between the rich and poor may increase .

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In an​ economy, if the government implements a law for individuals that requires them to save at least​ 25% of their annual income in a social savings plan framed by the government. For supporting this​ plan, the government raises revenues by implementing income tax rates that are higher compared to the other countries. Which of the following will be a​ result(s) of this​ scenario?

An increase in the deadweight losses. An increase in costs to the government.

The window tax is different from the U.S. income tax in that as windows​ increase, ____________.

Britain's window tax increases for all​ windows, and as income​ increases, the U.S. income tax rate increases on marginal income.

Which of the following are examples of inefficiencies created by government​ intervention?

Creating a large workforce of professionals who review whether the financial reports of companies are true and fair. Quality deterioration in a market after government implements a price control.

Which of the following arguments is not consistent with​ paternalism?

Individuals make choices that reflect their true preferences and know what is best for them.

Which of the following is the largest source of revenue for state​ governments?

Miscellaneous taxes and​ fees, such as tolls on roads and public transportation tickets.

Is the entire burden of the tax always borne by those on whom it is​ imposed?

Not​ necessarily, since the burden of the tax depends on price elasticity.

Examples of direct regulation include​ ____________. ​

Price floors fishing quotas anti smoking laws

Which of the following is not a result of​ corruption?

Selling goods at a price that does not include taxes.

Which of the following functions is beyond the scope of economics as far as government intervention is​ considered?

To make a value judgment on whether government is good or bad.

Do you think from 1747-1757 the number of new homes with 9 or fewer windows increased from the​ pre-1747 days?

Yes, because the marginal cost of having more windows increased.

The sources of revenue for state and local governments are ____ ____ those of the federal government.

different from

Direct regulation is​ ____________.

direct actions by the government to control the amount of an activity.

Consumer sovereignty suggests that​ ____________.

government should not interfere with consumer choices.

The largest source of revenue for the federal government is​ ___________.

individual income taxes.

Paternalism is the view that​ ___________.

people do not always know what is best for​ them, and government should encourage them to make the right choices.

Britain taxed windows from 1696 until 1851. Under the 1747-1757 tax​ rates, you would pay no tax if your home had 0-9 ​windows, but if your home had 10-14 windows you would pay a tax of 6 pence per window for every window in your home. The window tax is similar to the U.S. income tax in that both are​ ___________.

progressive taxes.

Tax incidence refers to​ ____________.

who bears the burden of a tax.