Ch.31 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. Suppose that Sam and Susan perceive $200 of marginal benefit from a proposed new park, whereas Keith perceives $800. If the tax levied on each for the park is $300, a majority vote will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  2. Answer the next question on the basis of this table showing the marginal benefit a particular public project will provide to each of the three members of a community. No vote trading is allowed.



    If the tax cost of this proposed project is $600 per person, a majority vote will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  3. Suppose that in a series of paired-choice votes a new park is preferred to new recreation center and a new recreation center is preferred to street widening. Also suppose that street widening is preferred to a new park. This set of votes is an example of the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  4. The median-voter model implies that a political office seeker will:   (4 points)

    a.  
    b.  
    c.  
    d.  

  5. The idea of government failure includes all of the following except:   (4 points)

    a.  
    b.  
    c.  
    d.  

  6. Public choice theorists contend public bureaucracies are inefficient primarily because:   (4 points)

    a.  
    b.  
    c.  
    d.  

  7. The ability-to-pay principle of taxation:   (4 points)

    a.  
    b.  
    c.  
    d.  

  8. Which of the following taxes reflects the benefits-received principle of taxation?   (4 points)

    a.  
    b.  
    c.  
    d.  

  9. Entry fees at national parks and monuments are an example of:   (4 points)

    a.  
    b.  
    c.  
    d.  

  10. The rationale for ability-to-pay taxation and the contention that those with large incomes should pay more taxes both absolutely and relatively is that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  11. The sales tax is a regressive tax because the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  12. Assume you pay a tax of $4000 on a taxable income of $24,000. If your taxable income were $30,000, your tax payment would be $5000. This suggests that the tax is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  13. The incidence of a tax pertains to:   (4 points)

    a.  
    b.  
    c.  
    d.  

  14. Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of demand for X is unitary (coefficient = 1). If the incidence of the tax is such that the producers of X pay $1.75 of the tax and the consumers pay $.25, we can conclude that the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  15.       

    In which of the above market situations will the efficiency loss of an excise tax be the greatest?   (4 points)

    a.  
    b.  
    c.  
    d.  

  16. Assume the demand for automobile tires is highly inelastic and that the supply is highly elastic. The burden of a $2 excise tax on each tire will be:   (4 points)

    a.  
    b.  
    c.  
    d.  

  17. The more inelastic is demand and supply the:   (4 points)

    a.  
    b.  
    c.  
    d.  

  18. (Advanced analysis) Answer the next question(s) 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 + .4 Q.

    Refer to the above information. The excise tax on each unit of the product is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  19. (Advanced analysis) Answer the next question(s) 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 + .4 Q.

    Refer to the above information. Government's revenue from this tax is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  20. Which of the following taxes is most likely to be shifted?   (4 points)

    a.  
    b.  
    c.  
    d.  

  21. Overall, the U.S. tax system (combined Federal, state, and local) is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  22. The U.S. tax-transfer system (as distinct from the tax system) is:   (4 points)

    a.  
    b.  
    c.  
    d.  

  23. In 1999 the 20 percent of families with the lowest incomes paid an average Federal tax rate (on all Federal taxes) of about ____ percent, whereas the 20 percent of families with the highest incomes paid an average tax rate of about ____ percent.   (4 points)

    a.  
    b.  
    c.  
    d.  

  24. Liberal economists contend that:   (4 points)

    a.  
    b.  
    c.  
    d.  

  25. Although state and local taxes are highly progressive, Federal taxation is predominantly regressive.   (4 points)

    a.  
    b.  



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