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According to economists, is a value-added tax a consumption tax? Answer: Public schools in poor city neighborhoods feel less pressure to perform well because parents ___. Answer: can’t afford private schools Insurance reduces the ___ of medical care to patients […]

The household income tax could be converted into a household consumption tax by letting households deduct ____. A. saving B. charitable contributions C. mortgage interest D. state and local property and income taxes Answer: In affluent towns, who benefits most […]

If the supply curve of X is steep and the demand curve is flat, then a $2 tax on the producers of X raises price ___ than $1 and most of the burden of the tax falls on the ___. […]

Coase pointed out that when victims are few, government need not ___, but should simply ___. A. regulate behavior; charge a price B. charge a price; regulate behavior C. assign property rights; charge a price D. charge a price; assign […]

The official poverty line is adjusted for ____ and ____. Answer: Under NUBAR, each year Congress must enact a ____ budget for the ____ fiscal year that ______ estimate would be balanced if ____ year’s unemployment rate is normal. Answer: […]

Self-interested affluent suburbanites should support state taxes to fund grants to cities for ______. Answer: A state uses a variable matching grant to induce all districts to _____ and to reduce _____ among districts. Answer: spend more on education; inequality […]

The marginal ____ from reduced future warming is measured by the ___ value of crops saved, floods avoided, and less air-conditioning needed. A. cost; environmental B. cost; dollar C. benefit; environmental D. benefit; dollar Answer: The price system is ___ […]

With federal spending 20% of GDP and borrowing 4% of GDP in the 1980s, for every $100 the federal government spent, ___ were borrowed and ___ came from tax revenue. A. $80; $20 B. $60; $40 C. $40; $60 D. […]

The ___ was intended to apply only to the rich but will soon apply to the middle-class unless Congress indexes it for ___. A. ATM; inflation B. AMT; inflation C. ATM; recession D. AMT; recession Answer: If the supply curve […]

If profit occurs in year 2, then it should be divided by ___. A. r B. (1+r) C. r2 D. (1+r)2 Answer: There ___ to charge a price for the air or water: ____. A. is one way; levy a […]

Explain why government borrowing shifts the burden from present taxpayers to future taxpayers. Answer: If the supply curve of X is flat (elastic) and the demand curve is steep (inelastic), then a $2 tax on producers of X raises price […]

The plan called Responsible Health Insurance has the following elements: A. an individual requirement to obtain insurance, a refundable tax credit, and last resort insurance. B. an individual requirement to obtain insurance and a refundable tax credit. C. an individual […]

Today, the first word in the name of the U.S. federal welfare program is what? A. Timely B. Temporary C. Active D. Aid Answer: Under the Medicare prescription drug program, the typical patient has a range called the “___” hole […]

The estate tax is a tax on a person’s ___ at death plus ____ earlier in life. Answer: With federal spending 20% of GDP and borrowing 4% of GDP in the 1980s, for every $100 the federal government spent, ___ […]

If the tax on a good doubles, T doubles, ΔQ ____, and the efficiency loss _____. Answer: Assume there is no externality. The inefficiency from the subsidy equals the area of a ___ to the ___ of the intersection of […]

A public school system ______. A. has selective admissions and tuition B. has selective admissions and no tuition C. has no admissions testing and has tuition D. has no admissions testing and no tuition Answer: Another way to reduce the […]

A VAT is _____ with respect to _____. A. regressive; consumption B. regressive; income C. progressive; consumption D. progressive; income Answer: With no policy, each firm emits 120 tons of carbon. As H reduces its emissions from 120 to 0, […]

Under a defined-benefit plan from the government, the worker will not receive a retirement benefit if ____. Answer: Explain why a retail sales tax or a value-added tax is regressive. What can be done to reduce its regressivity? Is there […]

With no policy, each firm emits 120 tons of carbon. As H reduces its emissions from 120 to 0, its marginal abatement cost (MAC) rises from $0 to $480; as L reduces its emissions from 120 to 0, its MAC […]

If the demand curve is horizontal, ε is the elasticity of labor supply, and t is the tax rate, the efficiency loss equals ___. A. (1/2)tεWH B. (1/2)t2εWH C. tεWH D. t2εWH Answer: Under this method, retirees depend on A. […]

Under a defined-benefit plan from a firm, the worker will not receive a retirement benefit A. only if the firm goes bankrupt. B. only if the worker leaves the firm before retirement age. C. if the firm goes bankrupt or […]

The consumption tax rate is set so that it raises the same total revenue from the two persons as the 15% income tax ($30,000). Refer to Table 9.3. In the middle block, person C’s tax must be ____. Answer: Starting […]

If three people vote pair-wise between thin, intermediate, and thick, then there will not be a clear winner if one person’s preferences have a ____. A. single-valley B. double-valley C. single-peak D. double-peak Answer: A progressive tax ___ and causes […]

Public schools in affluent suburbs feel pressure to perform well because parents _____. A. can afford private schools B. value education more than material possessions C. have connections D. have political power Answer: Under a public school system there is […]

The distribution of the burden between suppliers and demanders does not depend on ___. A. relative elasticities B. who writes the check to the government C. either relative elasticities or who writes the check to the government D. whether the […]

Line #4 in the tax return is ___. Answer: Public schools in affluent suburbs feel pressure to perform well because parents _____. Answer: can afford private schools Public schools in poor neighborhoods would feel more pressure to perform well if […]

If parents die in debt, the children ____ legally obliged to repay the debt so the parents’ debt ___ directly burden the children. A. are; does B. are not; does C. are; does not D. are not; does not Answer: […]

Rising medical expenditures are caused mainly by A. managerial inefficiency. B. excessive regulation. C. new technology, procedures, and medications together with insurance. D. insurance. Answer: The cost to a person of undertaking higher education equals ___. A. tuition B. foregone […]

To make a free market work, government must provide A. protection of property rights. B. social security. C. health insurance. D. education. Answer: If labor supply is steeper than demand, a payroll tax on workers is born mostly by ___. […]

The long-term federal budget outlook is challenging because _______ steadily as a percent of GDP. A. tax revenue is projected to fall B. low-income assistance is projected to rise C. defense spending is projected to rise D. Medicare plus Medicaid […]

Local revenue comes mainly from the ___ tax. A. personal income B. corporate income C. property D. sales Answer: Selling versus giving permits: firms want ___; taxpayers should want ___. A. selling; giving B. giving; selling C. selling; selling D. […]

A tax on the producers of a good shifts A. up the demand curve. B. down the demand curve. C. up the supply curve. D. down the supply curve. Answer: Refer to Table 11.1. The district’s price for the low-income […]

If a citizen doesn’t pay for national defense, the citizen ______ get it. Hence, national defense is a ___ good. A. doesn’t; public B. doesn’t; private C. does; public D.does; private Answer: An individual requirement is aimed at preventing ______. […]