Micro Econ Chap 19

Suppose Ms. Sanchez has a total income of $200,000, has a taxable income of $120,000, and pays $40,000 in taxes. Considering the information, what is Ms. Sanchez's effective tax rate?

20 percent

A tax is said to be efficient if it:

Allows producers to be rewarded according to their value in production.

Public housing is an example of:

In-kind income.

In-kind benefits are a way of correcting:

Inequity.

A tax is said to be more equitable if:

It allows incomes after taxes to be more equitable.

If income is distributed equally, the:

Lorenz curve is a straight line.

A graphic illustration of the cumulative size distribution of income is known as the:

Lorenz curve.

The argument against greater equality in the distribution of income in the United States hinges basically on:

Loss of incentives.

Which of the following statements regarding the distribution of money income is most correct?

The distribution of money income overstates the extent of poverty in the United States.

Tax incidence most accurately refers to:

The distribution of the real burden of a tax.