Question 1

-Refer to Table 12-8.Which tax illustrates a lump-sum tax

Accepted Answer

A)  tax A
B)  tax B
C)  tax C
D)  tax DE) C) and D)
F) All of the above

Question 2

Which statement best describes the flypaper theory of tax incidence

Accepted Answer

A)  It ignores the indirect effects of taxes.
B)  It assumes that most taxes should be "stuck on" the rich.
C)  It says that once a tax has been imposed, there is little chance of it changing, so in essence people are stuck with it.
D)  It is how taxes are described: like flies, they are everywhere and they will never go away.E) C) and D)
F) A) and B)

Question 3

What is an advantage of a consumption tax over the present tax system

Accepted Answer

A)  A consumption tax is much harder for taxpayers to cheat.
B)  A consumption tax would save the government millions in administrative costs.
C)  A consumption tax places more of the tax burden on the wealthy.
D)  A consumption tax does not discourage saving.E) B) and C)
F) C) and D)

Question 4

What is the single largest expenditure by provincial governments

Accepted Answer

A)  social services
B)  debt service
C)  health
D)  educationE) A) and C)
F) A) and B)

Question 5

Table 12-5 
-Refer to Table 12-5.What is the approximate average tax rate for a person who makes $130,000

Accepted Answer

A)  30%
B)  40%
C)  50%
D)  60%E) None of the above
F) A) and D)

Question 6

When the marginal tax rate equals the average tax rate,what is the tax called

Accepted Answer

A)  proportional
B)  progressive
C)  regressive
D)  egalitarianE) B) and C)
F) A) and C)

Question 7

What determines the deadweight loss of an income tax

Accepted Answer

A)  the amount of total tax revenue to the government
B)  the marginal tax rate
C)  the average tax rate
D)  the loss in consumer surplus when the tax is imposedE) None of the above
F) B) and C)

Question 8

What is part of the administrative burden of a tax associated with

Accepted Answer

A)  the money people pay to the government in taxes
B)  reducing the size of the market because of the tax
C)  the time taxpayers spend filling out tax forms
D)  the cost of administering programs that use tax revenueE) B) and C)
F) None of the above

Question 9

Table 12-3
 
-Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Accepted Answer

A)  It falls by less than the tax revenue generated.
B)  It falls by more than the tax revenue generated.
C)  It falls by the same amount as the tax revenue generated.
D)  It will not fall since Jennifer will no longer be in the market.E) A) and B)
F) A) and C)

Question 10

How is a tax system best defined if it is characterized by small deadweight losses and small administrative burdens

Accepted Answer

A)  equitable
B)  communistic
C)  capitalistic
D)  efficientE) A) and B)
F) All of the above

Question 11

What is the second largest component of provincial spending,after health care

Accepted Answer

A)  education
B)  social services
C)  transportation and communication
D)  police and protectionE) A) and D)
F) B) and C)

Question 12

The administrative burden of complying with the tax laws is a cost to the government,but not to taxpayers.

Accepted Answer

A) True 
 B)False

Question 13

What is a payroll tax

Accepted Answer

A)  a tax on the wages that a firm pays its workers
B)  a tax on each additional dollar of income earned by a worker
C)  a tax on specific goods like gasoline and cigarettes
D)  a tax on a firm based on the number of workers it has on its payrollE) A) and B)
F) C) and D)

Question 14

How do provincial governments receive revenue from within the tax system

Accepted Answer

A)  They are funded entirely by their own tax base.
B)  They receive the majority of their tax revenues from corporate income tax.
C)  They are generally not responsible for collecting sales tax.
D)  They receive some of their funds from the federal government.E) C) and D)
F) B) and C)

Question 15

Scenario 12-1
Suppose Jeremy and Kelsey receive great satisfaction from their consumption of turkey.Kelsey would be willing to purchase only one slice and would pay up to $5 for it.Jeremy would be willing to pay $8 for his first slice, $6 for his second slice, and $2 for his third slice.The current market price is $2 per slice.
-Refer to Scenario 12-1.How much total consumer surplus do Kelsey and Jeremy collectively receive from consuming turkey when it is priced at $2 a slice

Accepted Answer

A)  $3
B)  $6
C)  $9
D)  $12E) A) and C)
F) B) and C)

Question 16

An efficient tax system is one that imposes small deadweight losses and small administrative burdens.

Accepted Answer

A) True 
 B)False

Question 17

What is the most meaningful measure if we are trying to gauge how much the income tax system distorts incentives

Accepted Answer

A)  the average tax rate
B)  the deadweight loss
C)  total tax revenue collected
D)  the marginal tax rateE) None of the above
F) A) and D)

Question 18

Table 12-3
 
-Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Accepted Answer

A)  It will fall from $3 to $1.
B)  It will fall from $4 to $1.
C)  It will fall from $7 to $3.
D)  It will fall from $7 to $4.E) A) and D)
F) A) and C)

Question 19

According to the ability-to-pay principle,it is fair for people to pay taxes based on their ability to handle the financial burden.

Accepted Answer

A) True 
 B)False

Question 20

Larry faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 40 percent on all additional income.If Larry earns $75,000,what is his average tax rate

Accepted Answer

A)  20 percent
B)  25.33 percent
C)  30 percent
D)  36.67 percentE) None of the above
F) A) and B)

Exam 12: The Design of the Tax System

What is the second largest component of provincial spending,after health care

Correct Answer
verified

Larry faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 40 percent on all additional income.If Larry earns $75,000,what is his average tax rate

Correct Answer
verified

What is the most meaningful measure if we are trying to gauge how much the income tax system distorts incentives

Correct Answer
verified

When the marginal tax rate equals the average tax rate,what is the tax called

Correct Answer
verified

What is a payroll tax

Correct Answer
verified

An efficient tax system is one that imposes small deadweight losses and small administrative burdens.

Correct Answer
verified

-Refer to Table 12-8.Which tax illustrates a lump-sum tax

Correct Answer
verified

What is the single largest expenditure by provincial governments

Correct Answer
verified

Table 12-5 -Refer to Table 12-5.What is the approximate average tax rate for a person who makes $130,000

Correct Answer
verified

How do provincial governments receive revenue from within the tax system

Correct Answer
verified

What determines the deadweight loss of an income tax

Correct Answer
verified

Table 12-3 -Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Correct Answer
verified

According to the ability-to-pay principle,it is fair for people to pay taxes based on their ability to handle the financial burden.

Correct Answer
verified

What is an advantage of a consumption tax over the present tax system

Correct Answer
verified

Table 12-3 -Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Correct Answer
verified

Which statement best describes the flypaper theory of tax incidence

Correct Answer
verified

Correct Answer
verified

How is a tax system best defined if it is characterized by small deadweight losses and small administrative burdens

Correct Answer
verified

The administrative burden of complying with the tax laws is a cost to the government,but not to taxpayers.

Correct Answer
verified

What is part of the administrative burden of a tax associated with

Correct Answer
verified

Exam 12: The Design of the Tax System

What is the second largest component of provincial spending,after health care

Correct AnswerverifiedShow Answer

Larry faces a progressive tax structure that has the following marginal tax rates: 0 percent on the first $10,000,10 percent on the next $10,000,15 percent on the next $10,000,25 percent on the next $10,000,and 40 percent on all additional income.If Larry earns $75,000,what is his average tax rate

Correct AnswerverifiedShow Answer

What is the most meaningful measure if we are trying to gauge how much the income tax system distorts incentives

Correct AnswerverifiedShow Answer

When the marginal tax rate equals the average tax rate,what is the tax called

Correct AnswerverifiedShow Answer

What is a payroll tax

Correct AnswerverifiedShow Answer

An efficient tax system is one that imposes small deadweight losses and small administrative burdens.

Correct AnswerverifiedShow Answer

-Refer to Table 12-8.Which tax illustrates a lump-sum tax

Correct AnswerverifiedShow Answer

What is the single largest expenditure by provincial governments

Correct AnswerverifiedShow Answer

Table 12-5 -Refer to Table 12-5.What is the approximate average tax rate for a person who makes $130,000

Correct AnswerverifiedShow Answer

How do provincial governments receive revenue from within the tax system

Correct AnswerverifiedShow Answer

What determines the deadweight loss of an income tax

Correct AnswerverifiedShow Answer

Table 12-3 -Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Correct AnswerverifiedShow Answer

According to the ability-to-pay principle,it is fair for people to pay taxes based on their ability to handle the financial burden.

Correct AnswerverifiedShow Answer

What is an advantage of a consumption tax over the present tax system

Correct AnswerverifiedShow Answer

Table 12-3 -Refer to Table 12-3.If the government imposes a $2.00 tax on Delights,causing the price to increase from $5.00 to $7.00,what happens to total consumer surplus

Correct AnswerverifiedShow Answer

Which statement best describes the flypaper theory of tax incidence

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How is a tax system best defined if it is characterized by small deadweight losses and small administrative burdens

Correct AnswerverifiedShow Answer

The administrative burden of complying with the tax laws is a cost to the government,but not to taxpayers.

Correct AnswerverifiedShow Answer

What is part of the administrative burden of a tax associated with

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified