micro Ch 10: The Government in the Economy

Which of the following does a tax rate refer to?

A percentage of income

Which of the following terms corresponds to a market where buying and selling take place at prices that violate government price regulations?

Black market

Which of the following statements about U.S. government revenues is correct?

Federal revenues have ranged between 17 and 19 percent of gross domestic product for a long time.

Which of these statements about the effect of taxes and transfer on income distribution is correct?

Income after taxes is more equally distributed than income before taxes.

Which of the following statements is correct about the U.S. tax system?

Payroll taxes include Social Security and Medicare taxes.

Which of the following corresponds to revenues at the state level of government?

Revenues mainly from intergovernmental grants, sales tax, and individual income tax

Which of the following is the marginal tax rate?

The fraction of each additional dollar of income that must be paid in taxes.

If the last dollar of income earned by individuals with the highest incomes is taxed at a rate that is less than the average tax rate, which of the following is correct?

The income tax is a regressive income tax.

How is the U.S. federal income tax structured?

The rate at which income is taxed increases as income increases.

Which of the following is the average tax rate?

The total tax paid divided by total income

If the federal government's expenditures are less than its revenue, there is a __________.

budget surplus

Black markets may arise if:

price ceilings exist

The federal income tax in the United States is a __________.

progressive tax

A tax is efficient if it imposes a __________ relative to the tax revenue it raises.

small excess burden

When the elasticity of demand for a product is __________ the elasticity of supply, consumers pay __________ of the tax on the product.

smaller than, the majority

The actual division of the tax burden between buyers and sellers is known as:

tax incidence

Tax incidence refers to __________.

the actual division of the tax between buyers and sellers in a market