Question 1

Time spent filling out tax forms, time spent keeping tax records, and government resources spent to enforce tax laws are examples of the of the U.S. income tax system.

Accepted Answer

administra...

Question 2

Antipoverty programs funded by taxes on the wealthy are sometimes advocated on the basis of the benefits principle.

Accepted Answer

A) True 
 B)False

Question 3

A tax system with little deadweight loss and a small administrative burden would be described as

Accepted Answer

A)   equitable.
B)   communistic.
C)   capitalistic.
D)   efficient.E) B) and D)
F) A) and B)

Question 4

Which of the following statements is not correct?

Accepted Answer

A)   A gasoline tax can be an example of a tax that uses the benefits principle.
B)   A progressive tax attempts to achieve vertical equity.
C)   A progressive tax can be an example of the ability-to-pay principle.
D)   A regressive tax attempts to achieve vertical equity.E) A) and B)
F) A) and C)

Question 5

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

Accepted Answer

A)   proportional.
B)   progressive.
C)   regressive.
D)   egalitarian.E) C) and D)
F) None of the above

Question 6

When a state levies a sales tax, the tax

Accepted Answer

A)   is paid only by the state's residents.
B)   occasionally excludes items that are deemed to be necessities.
C)   is commonly levied on labor services.
D)   applies to wholesale purchases but not retail purchases.E) A) and B)
F) None of the above

Question 7

A person's average tax rate equals her

Accepted Answer

A)   tax obligation divided by her marginal tax rate.
B)   increase in taxes if her income were to rise by $1.
C)   tax obligation divided by her income.
D)   increase in taxes if her marginal tax rate were to rise 1percent.E) A) and C)
F) A) and D)

Question 8

Most people agree that the tax system

Accepted Answer

A)   should be both efficient and equitable.
B)   cannot raise enough revenue to cover government expenditures.
C)   would raise more revenue if tax rates were lowered.
D)   should be rewritten to require everyone to pay the same percentage of income in taxes.E) All of the above
F) B) and D)

Question 9

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Accepted Answer

A)   tax evasion
B)   a political payoff
C)   a tax loophole
D)   compensation for the benefit of societyE) A) and B)
F) None of the above

Question 10

Table 12-1 
-Refer to Table 12-1. Assume that the price of a weekend ski pass is $45 and that the price reflects the actual unit cost of providing a weekend of skiing. Suppose the government imposes a tax of $12 on skiing, which raises the price of a weekend ski pass to $57. The deadweight loss associated with the tax is

Accepted Answer

A)   $5.
B)   $12.
C)   $36.
D)   $41.E) A) and D)
F) A) and C)

Question 11

Income taxes and property taxes generate the highest tax revenue for state and local governments.

Accepted Answer

A) True 
 B)False

Question 12

Because the marginal tax rate rises as income rises,

Accepted Answer

A)   higher income families, in general, pay a larger percentage of their income in taxes.
B)   lower income families, in general, pay a larger percentage of their income in taxes.
C)   a disproportionately large share of the tax burden falls upon the poor.
D)   higher income families pay the same percentage of their income in taxes as lower-income families.E) B) and D)
F) A) and C)

Question 13

Suppose that Deon places a $150 value on a new MP-3 player, and Juanita places a $140 value on it. The cost of the MP-3 player is $130. Suppose the government levies a $15 tax on MP-3 players, which raises the price to $145. What is the deadweight loss created by the tax?

Accepted Answer

Before the tax, the total surplus was $3...

Question 14

If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is

Accepted Answer

A)   8 percent.
B)   12.5 percent.
C)   20 percent.
D)   unknown. We do not have enough information to answer this question.E) B) and D)
F) C) and D)

Question 15

Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013. 
-Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What happened to her marginal tax rate between 2012 and 2013?

Accepted Answer

A)   It increased.
B)   It decreased.
C)   It did not change.
D)   We do not have enough information to answer this question.E) A) and D)
F) A) and C)

Question 16

A payroll tax is a tax on

Accepted Answer

A)   the wages that a firm pays its workers.
B)   earned and unearned income.
C)   specific goods like gasoline and cigarettes.
D)   corporate profits.E) None of the above
F) C) and D)

Question 17

Table 12-22 
-Refer to Table 12-22. A regressive tax is illustrated by tax

Accepted Answer

A)   A only.
B)   B or D.
C)   C only.
D)   A or D.E) B) and C)
F) A) and B)

Question 18

The typical state spends the most on

Accepted Answer

A)   education.
B)   Medicare and Social Security.
C)   highways.
D)   defense.E) B) and D)
F) C) and D)

Question 19

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Karen paid $6,000 in taxes. What were her marginal and average tax rates?

Accepted Answer

A)   20 percent and 12 percent, respectively
B)   20 percent and 15 percent, respectively
C)   10 percent and 12 percent respectively
D)   10 percent and 15 percent respectivelyE) A) and D)
F) B) and C)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 12: The Design of the Tax System

A tax system with little deadweight loss and a small administrative burden would be described as

Correct Answer
verified

Suppose that Deon places a $150 value on a new MP-3 player, and Juanita places a $140 value on it. The cost of the MP-3 player is $130. Suppose the government levies a $15 tax on MP-3 players, which raises the price to $145. What is the deadweight loss created by the tax?

Correct Answer
verified
Before the tax, the total surplus was $3...
View Answer

Antipoverty programs funded by taxes on the wealthy are sometimes advocated on the basis of the benefits principle.

Correct Answer
verified

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

Correct Answer
verified

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is

Correct Answer
verified

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What happened to her marginal tax rate between 2012 and 2013?

Correct Answer
verified

The typical state spends the most on

Correct Answer
verified

Table 12-22 -Refer to Table 12-22. A regressive tax is illustrated by tax

Correct Answer
verified

Because the marginal tax rate rises as income rises,

Correct Answer
verified

A person's average tax rate equals her

Correct Answer
verified

Correct Answer
verified

A payroll tax is a tax on

Correct Answer
verified

Income taxes and property taxes generate the highest tax revenue for state and local governments.

Correct Answer
verified

Time spent filling out tax forms, time spent keeping tax records, and government resources spent to enforce tax laws are examples of the of the U.S. income tax system.

Correct Answer
verified
administra...
View Answer

Most people agree that the tax system

Correct Answer
verified

When a state levies a sales tax, the tax

Correct Answer
verified

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Karen paid $6,000 in taxes. What were her marginal and average tax rates?

Correct Answer
verified

Exam 12: The Design of the Tax System

A tax system with little deadweight loss and a small administrative burden would be described as

Correct AnswerverifiedShow Answer

Suppose that Deon places a $150 value on a new MP-3 player, and Juanita places a $140 value on it. The cost of the MP-3 player is $130. Suppose the government levies a $15 tax on MP-3 players, which raises the price to $145. What is the deadweight loss created by the tax?

Correct AnswerverifiedBefore the tax, the total surplus was $3...View AnswerShow Answer

Antipoverty programs funded by taxes on the wealthy are sometimes advocated on the basis of the benefits principle.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following describes a situation where tax laws give preferential treatment to specific types of behavior?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is

Correct AnswerverifiedShow Answer

Table 12-9 United States Income Tax Rates for a Single Individual, 2012 and 2013. -Refer to Table 12-9. Ruby Sue is a single person whose taxable income is $100,000 a year. What happened to her marginal tax rate between 2012 and 2013?

Correct AnswerverifiedShow Answer

The typical state spends the most on

Correct AnswerverifiedShow Answer

Table 12-22 -Refer to Table 12-22. A regressive tax is illustrated by tax

Correct AnswerverifiedShow Answer

Because the marginal tax rate rises as income rises,

Correct AnswerverifiedShow Answer

A person's average tax rate equals her

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A payroll tax is a tax on

Correct AnswerverifiedShow Answer

Income taxes and property taxes generate the highest tax revenue for state and local governments.

Correct AnswerverifiedShow Answer

Time spent filling out tax forms, time spent keeping tax records, and government resources spent to enforce tax laws are examples of the of the U.S. income tax system.

Correct Answerverifiedadministra...View AnswerShow Answer

Most people agree that the tax system

Correct AnswerverifiedShow Answer

When a state levies a sales tax, the tax

Correct AnswerverifiedShow Answer

The income tax requires that taxpayers pay 10percent on the first $40,000 of income and 20 percent on all income over $40,000. Karen paid $6,000 in taxes. What were her marginal and average tax rates?

Correct AnswerverifiedShow Answer

Correct Answer
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Before the tax, the total surplus was $3...
View Answer

Correct Answer
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administra...
View Answer

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