Econ 211 Exam 4

Which of the following does a income tax rate refer to? A. A percentage of income B. An income tax range C. The portion of income exempt from taxes

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? A. Black market B. Competitive market C. Inviolate market

Black market

What does a deadweight loss from a tax consist of? A. Buyers who must leave the market because they can't afford to pay the higher price and sellers who must leave the market because they can't produce at a lower price. B. Buyers who must leave the market because they can't afford the pay the higher price, and sellers who enter the market because they can take advantage of the higher price. C. Sellers who must leave the market because they can't produce at the lower price, and buyers who enter the market because they can take advantage of the lower price. D. Buyers who enter the market because they can take advantage of the lower price that producers receive, and sellers who enter the market because they can take advantage of the higher price that buyers pay.

Buyers who must leave the market because they can't afford to pay the higher price and sellers who must leave the market because they can't produce at a lower price.

Which of the following statements about U.S. government revenues is correct? A. Federal revenues have ranged between 25 and 30 percent of GDP for a long time. B. Federal revenues exceeded federal expenditures during 2014. C. Federal revenues are normally within 10 percent of federal expenditures.

Federal revenues have ranged between 25 and 30 percent of GDP for a long time.

Which of these statements about the effect of taxes and transfers on income distribution is correct? A. Income after taxes is more equally distributed than income before taxes. B. The Social Security system has failed to reduce poverty among people older than sixty-five. C. The distribution of income worsens when we take transfer payments into account.

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

Which of the following statements is correct about the U.S. tax system? A. Payroll taxes include Social Security and Medicare taxes. B. Most taxes are intended to discourage behavior instead of raise money. C. The sales tax is the largest source of funds for public schools.

Payroll taxes include Social Security and Medicare taxes.

Which of the following corresponds to revenues at the state level of government? A. Revenues mainly redistributed from the Federal government, sales tax, and property tax. B. Revenues from import taxes and individual income tax. C. Revenues from individual income taxes, employment taxes, including social security taxes.

Revenues mainly redistributed from the Federal government, sales tax, and property tax.

Which of the following is the marginal tax rate? A. The fraction of each additional dollar of income that must be paid in taxes. B. The total tax paid divided by total income. C. The tax rate paid by the average taxpayer.

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? A. The income tax is a regressive income tax. B. The income tax is a progressive income tax. C. The marginal tax rate is equal to the average tax rate.

The income tax is a regressive income tax

How is the U.S. federal income tax structured? A. The rate at which income is taxed increases as income increases. B. All taxpayers pay the same tax rate. C. The rate at which income is taxed decreases as income increases.

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

Which of the following is the average tax rate? A. The total tax paid divided by total income B. The fraction of each additional dollar of income that must be paid in taxes C. The tax rate paid by the average taxpayer

The total tax paid divided by total income

Which of these best represents a tax equal to the value of the negative externality? A. The vertical distance between S1 and S2. B. The linear distance between P1 and P2. C. The difference between P2 and P1.

The vertical distance between S1 and S2.

If the federal government's expenditures are less than its revenue, there is a __________. A. budget surplus B. budget deficit C. bond sale

budget surplus

A tax is efficient if it imposes __________ . A. no deadweight loss B. minimal burden to consumers C. minimal deadweight loss

no deadweight loss

Black markets may arise if: A. price ceilings exist B. the equilibrium price is too low C. governments do not intervene in the market

price ceilings exist

A legally determined minimum price that sellers must receive is known as a: A. price floor B. price ceiling C. reservation price

price floor

The federal income tax in the United States is a __________. A. progressive tax B. regressive tax C. proportional (flat) tax

progressive tax

When the elasticity of demand for a product is __________ the elasticity of supply, consumers pay __________ of the tax on the product. A. smaller than, more than half B. larger than, more than half C. smaller than, less than half

smaller than, more than half

The actual division of the tax burden between buyers and sellers is known as: A. tax incidence B. tax allocation C. tax distribution

tax incidence

Tax incidence refers to __________. A. the actual division of the tax between buyers and sellers in a market B. deadweight loss from the tax C. excess burden of the tax

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