Question 1

The following data represent a personal income tax schedule.Answer the question on the basis of this information.   Taxable Income  Total Tax $0$02,0002004,0006006,0001,2008,0002,00010,0003,000\begin{array} { c c } 	ext { Taxable Income } & 	ext { Total Tax } \\hline\$ 0 & \$ 0 \2,000 & 200 \4,000 & 600 \6,000 & 1,200 \8,000 & 2,000 \10,000 & 3,000\end{array} Taxable Income $02,0004,0006,0008,00010,000​ Total Tax $02006001,2002,0003,000​​  Refer to the table.This tax is such that the after-tax distribution of income will be:

Accepted Answer

A)   more equal than the before-tax distribution.
B)   less equal than the before-tax distribution.
C)   distributed in precisely the same way as the before-tax distribution.
D)   less than the before-tax distribution by the same percentage at each income level. E) None of the above
F) All of the above

Question 2

At the state and local levels of the U.S.government,a majority of government employees work in which of the following areas?

Accepted Answer

A)   Postal service.
B)   Education.
C)   Hospitals and other health care.
D)   Police and corrections.E) C) and D)
F) A) and B)

Question 3

If you would have to pay $5,000 in taxes on a $25,000 taxable income and $7,000 on a $30,000 taxable income,then the marginal tax rate on the additional $5,000 of income is:

Accepted Answer

A)   40 percent and the average tax rate is about 23 percent at the $30,000 income level.
B)   50 percent and the average tax rate is 40 percent at the $30,000 income level.
C)   40 percent and the average tax rate is 25 percent at the $25,000 income level.
D)   30 percent,but average tax rates cannot be determined from the information given.E) A) and C)
F) A) and B)

Question 4

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Accepted Answer

A) True 
 B)False

Question 5

An income tax is progressive if the:

Accepted Answer

A)   absolute amount paid as taxes varies directly with income.
B)   percentage of income paid as taxes is the same regardless of the size of income.
C)   percentage of income paid as taxes increases as income increases.
D)   tax rate varies inversely with income.E) C) and D)
F) B) and D)

Question 6

(Advanced analysis) Answer the question on the basis of the following information: The equations for the demand and supply curves for a particular product are P = 10 - .4Q and P = 2 + .4Q,where P is price and Q is quantity expressed in units of 100.After an excise tax is imposed on the product,the supply equation is P = 3 + .4Q. Refer to the given information.The excise tax on each unit of the product:

Accepted Answer

A)   is $1.
B)   is $2.
C)   is $3.
D)   cannot be determined with the information given.E) C) and D)
F) B) and C)

Question 7

A progressive tax takes relatively more from the rich than it does from the poor.

Accepted Answer

A) True 
 B)False

Question 8

The largest category of federal spending is for:

Accepted Answer

A)   health care.
B)   science,space,and technology.
C)   pensions and income security.
D)   national defense.E) A) and B)
F) A) and C)

Exam 19: Public Finance: Expenditures and Taxes

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Correct Answer
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Correct Answer
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A progressive tax takes relatively more from the rich than it does from the poor.

Correct Answer
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At the state and local levels of the U.S.government,a majority of government employees work in which of the following areas?

Correct Answer
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Correct Answer
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The largest category of federal spending is for:

Correct Answer
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An income tax is progressive if the:

Correct Answer
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If you would have to pay $5,000 in taxes on a $25,000 taxable income and $7,000 on a $30,000 taxable income,then the marginal tax rate on the additional $5,000 of income is:

Correct Answer
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Exam 19: Public Finance: Expenditures and Taxes

The efficiency loss of a tax is the tax revenue collected by government minus the value of the public goods financed through the tax.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A progressive tax takes relatively more from the rich than it does from the poor.

Correct AnswerverifiedShow Answer

At the state and local levels of the U.S.government,a majority of government employees work in which of the following areas?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The largest category of federal spending is for:

Correct AnswerverifiedShow Answer

An income tax is progressive if the:

Correct AnswerverifiedShow Answer

If you would have to pay $5,000 in taxes on a $25,000 taxable income and $7,000 on a $30,000 taxable income,then the marginal tax rate on the additional $5,000 of income is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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