Question 1

Refer to the information provided in Table 19.7 below to answer the question(s)  that follow.
Table 19.7 
-Refer to Table 19.7. The tax rate structure in this example is

Accepted Answer

A)   proportional.
B)   progressive.
C)   regressive.
D)   marginal.

Question 2

The total burden of a tax is $10,000 and the tax revenue from this tax is $8,000. The excess burden of this tax is

Accepted Answer

A)   $2,000.
B)   $8,000.
C)   $10,000.
D)   $18,000.

Question 3

The progressive income tax is a tax based on the

Accepted Answer

A)   benefits-received principle.
B)   tax equity principle.
C)   efficiency tax principle.
D)   ability-to-pay principle.

Question 4

Excess burden is the total burden of a tax minus the tax revenue generated by the tax.

Accepted Answer

A) True 
 B)False

Question 5

A local property tax is a tax on ________, while a tax on your salary is a tax on ________.

Accepted Answer

A)   a flow; a stock
B)   a stock; a flow
C)   a flow; income
D)   a residential holding; a flow

Question 6

The total amount of tax you pay divided by your total income is the

Accepted Answer

A)   marginal tax rate.
B)   average tax rate.
C)   total tax rate.
D)   proportional tax rate.

Question 7

As a result of an increase in the payroll tax that employers must pay on their employeesʹ wages, employers reduce the starting wage for new employees. This is an example of

Accepted Answer

A)   tax shifting.
B)   tax incidence.
C)   a regressive tax.
D)   tax avoidance.

Question 8

The excess burden of a tax is $5,000 and the tax revenue from this tax is $15,000. The total burden of this tax is

Accepted Answer

A)   $3,000.
B)   $5,000.
C)   $10,000.
D)   $20,000.

Question 9

Which of the following is a base on which taxes are levied in the United States?

Accepted Answer

A)   income
B)   sales
C)   property
D)   all of the above

Question 10

________ is caused by the fact that taxes distort economic decisions.

Accepted Answer

A)   Neutrality
B)   Excess burden
C)   Tax shifting
D)   Market failure

Question 11

During 2016, Sean's consumption equals $25,000 and the change in his net worth is -$5,000. Sean's economic income for 2012 is

Accepted Answer

A)   $5,000.
B)   $20,000.
C)   $25,000.
D)   $30,000.

Question 12

The excess burden of a tax is $5,000 and the tax revenue from this tax is $20,000. The total burden of this tax is

Accepted Answer

A)   $4,000.
B)   $5,000.
C)   $15,000.
D)   $25,000.

Question 13

Consumption is a flow measure.

Accepted Answer

A) True 
 B)False

Question 14

The property that a person owns at the time of her death is her estate.

Accepted Answer

A) True 
 B)False

Question 15

The ________ is the percentage of a tax base that must be paid in taxes.

Accepted Answer

A)   tax base
B)   tax incidence
C)   proportional tax
D)   tax rate structure

Question 16

The United States payroll tax is progressive.

Accepted Answer

A) True 
 B)False

Question 17

The tax ________ is the measure or value upon which a government levies a tax.

Accepted Answer

A)   base
B)   rate
C)   structure
D)   incidence

Question 18

Which of the following is a tax based on the benefits-received principle?

Accepted Answer

A)   A property tax, if the revenue is used to finance public education.
B)   A tax on imports that is used to finance job retraining for workers who have lost their jobs because of the competition from imported products.
C)   A progressive income tax that is used to finance national defense.
D)   A tax added to the camping fee at national parks that is used to maintain and upgrade camping facilities at national parks.

Question 19

Refer to the information provided in Figure 19.1 below to answer the question(s)  that follow.  Figure 19.1
-Refer to Figure 19.1. Prior to the imposition of the payroll tax, this labor market ________ at a wage of $7.00 and employment of 800 workers.

Accepted Answer

A)   was employing too many workers
B)   was in equilibrium
C)   was employing too few workers
D)   was paying too high a wage rate

Question 20

The measure or value upon which a tax is levied is the

Accepted Answer

A)   tax base.
B)   tax rate.
C)   tax structure.
D)   tax incidence.

Exam 19: Public Finance: The Economics of Taxation

The excess burden of a tax is $5,000 and the tax revenue from this tax is $20,000. The total burden of this tax is

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The measure or value upon which a tax is levied is the

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The ________ is the percentage of a tax base that must be paid in taxes.

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Which of the following is a tax based on the benefits-received principle?

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The total amount of tax you pay divided by your total income is the

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Refer to the information provided in Figure 19.1 below to answer the question(s) that follow. Figure 19.1 -Refer to Figure 19.1. Prior to the imposition of the payroll tax, this labor market ________ at a wage of $7.00 and employment of 800 workers.

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________ is caused by the fact that taxes distort economic decisions.

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The United States payroll tax is progressive.

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Consumption is a flow measure.

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The excess burden of a tax is $5,000 and the tax revenue from this tax is $15,000. The total burden of this tax is

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The progressive income tax is a tax based on the

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Which of the following is a base on which taxes are levied in the United States?

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As a result of an increase in the payroll tax that employers must pay on their employeesʹ wages, employers reduce the starting wage for new employees. This is an example of

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A local property tax is a tax on ________, while a tax on your salary is a tax on ________.

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The property that a person owns at the time of her death is her estate.

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During 2016, Sean's consumption equals $25,000 and the change in his net worth is -$5,000. Sean's economic income for 2012 is

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The tax ________ is the measure or value upon which a government levies a tax.

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The total burden of a tax is $10,000 and the tax revenue from this tax is $8,000. The excess burden of this tax is

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Refer to the information provided in Table 19.7 below to answer the question(s) that follow. Table 19.7 -Refer to Table 19.7. The tax rate structure in this example is

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Excess burden is the total burden of a tax minus the tax revenue generated by the tax.

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A local property tax is a tax on , while a tax on your salary is a tax on .

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