Economics Chapter 7 Multiple Choice Tax That Rises Less Than

145. Multiple Choice: Which of the following taxes reflects...

Question Which of the following taxes reflects the ability–to–pay principle?

146. Multiple Choice: Criteria that economists use in selec...

Question Criteria that economists use in selecting a tax system include:

147. Multiple Choice: The ________ principle implies that p...

Question The ________ principle implies that people with ________ should pay more taxes.

Answer ability-to-pay; greater benefits received

148. Multiple Choice: A principle suggesting that people wi...

Question A principle suggesting that people with more income or wealth should pay more

taxes is the:

Points: 0

149. Multiple Choice: According to the benefits principle, ...

Question According to the benefits principle, which of the following is the best example of

taxation?

Answer income tax

150. Multiple Choice: Paying a fee every time you use the m...

Question Paying a fee every time you use the municipal golf course is an example of the:

regressive tax principle.

151. Multiple Choice: Taxation according to the ability-to-…

Question Taxation according to the ability–to-pay principle is best illustrated in the United

States by:

Answer sales taxes.

152. Multiple Choice: Since the terrorist attacks of Septem...

Question Since the terrorist attacks of September 11, 2001, the FAA has added a small

security fee to every airplane ticket purchased. This is an example of:

Points: 0

153. Multiple Choice: According to the ________, those who ...

Question According to the ________, those who benefit from public spending should bear the

burden of the tax that pays for the spending.

Answer ability-to-pay principle

154. Multiple Choice: According to the ________, those with...

Question According to the ________, those with greater ability to pay a tax should pay more

tax.

affordability principle

155. Multiple Choice: Which of the following taxes best ill...

Question Which of the following taxes best illustrates the benefits principle of tax fairness?

Answer The local city playground is funded through a tax on all citizens.

Points: 0

156. Multiple Choice: Which of the following taxes best ill...

Question Which of the following taxes best illustrates the ability-to-pay principle of tax

fairness?

Answer The local city playground is funded through a tax on all citizens.

157. Multiple Choice: A principle suggesting that people wi...

Question A principle suggesting that people with more income or wealth should pay more

taxes is the:

Answer ability-to-pay principle.

proportional tax principle.

lump-sum tax principle.

benefits received principle.

158. Multiple Choice: Taxation according to the ability-to-…

Question Taxation according to the ability–to-pay principle is best illustrated in the United

States by:

Answer sales taxes.

159. Multiple Choice: Taxation according to the benefits-re…

Question Taxation according to the benefits-received principle is best illustrated by:

Answer income tax.

Points: 0

160. Multiple Choice: You have to pay a fee every time you ...

Question You have to pay a fee every time you use your community swimming pool. This is

an example of the:

Answer regressive tax principle.

ability–to-pay principle.

161. Multiple Choice: If tax efficiency is the only goal, a...

Question If tax efficiency is the only goal, a tax system should be designed to minimize its:

Answer burden.

162. Multiple Choice: A tax system achieves equity when:

Question A tax system achieves equity when:

Points: 0

163. Multiple Choice: A tax system achieves efficiency when:

Question A tax system achieves efficiency when:

Answer the “right” people actually bear the burden of taxes.

164. Multiple Choice: If a tax system is poorly designed, i...

Question If a tax system is poorly designed, it may be possible to increase:

Answer efficiency without sacrificing equity.

165. Multiple Choice: Suppose Congress passed a new tax sys...

Question Suppose Congress passed a new tax system, such that all federal, state, and

local taxes were replaced with one tax: a tax of $14,000 for every person 18 and

over. This new tax system would clearly improve:

Answer tax equity.

166. Multiple Choice: A tax system ________ when it minimiz...

Question A tax system ________ when it minimizes the direct and indirect costs to the

economy of tax collection.

Points: 0

167. Multiple Choice: A tax system ________ when the &ldquo...

Question A tax system ________ when the “right people actually bear the burden of taxes.”

Answer is efficient

168. Multiple Choice: If a tax system is designed to minimi…

Question If a tax system is designed to minimize the sum of its deadweight loss and its

administrative cost, then:

169. Multiple Choice: Which of the following does not disto...

Question Which of the following does not distort incentives and is best at promoting

economic efficiency?

170. Multiple Choice: If a tax system is well designed, it ...

Points: 0

Question If a tax system is well designed, it must be true that:

Answer it maximizes efficiency.

171. Multiple Choice: Which of the following statements in ...

Question Which of the following statements in correct?

172. Multiple Choice: The richest 20% of families in the Un…

Question The richest 20% of families in the United States pay a much ________ share of

total income taxes collected and a ________ share of total payroll taxes than their

share of total income.

173. Multiple Choice: The poorest 20% of families in the Un...

Question The poorest 20% of families in the United States pay a ________ share of their

total income in taxes.

Answer very large

Points: 0

174. Multiple Choice: Figure: Income Tax Payments Reference…

Question Figure: Income Tax Payments

Reference: Ref 7-14

(Figure: Income Tax Payments) Look at the figure Income Tax Payments. Which

panel or panels best represent the effects of a progressive income tax?

Answer A

175. Multiple Choice: Figure: Income Tax Payments Reference…

Question Figure: Income Tax Payments

Reference: Ref 7-14

(Figure: Income Tax Payments) Look at the figure Income Tax Payments. Which

panel or panels best represent the effects of a proportional income tax?

Points: 0

176. Multiple Choice: Figure: Income Tax Payments Reference…

Question Figure: Income Tax Payments

Reference: Ref 7-14

(Figure: Income Tax Payments)Look at the figure Income Tax Payments. Which

panel or panels best represent the effects of a regressive income tax?

Answer A

177. Multiple Choice: Brianna and Jess must pay an income t…

Question Brianna and Jess must pay an income tax. Both Brianna and Jess pay $1,000 in

taxes each year, but Brianna earns $20,000 and Jess earns $10,000. From this

information, you can infer that the tax system is:

Answer progressive.

178. Multiple Choice: Suppose a government imposes an incom…

Question

Points: 0

Suppose a government imposes an income tax that taxes 0% of the first $1,000,

10% of the next $10,000, and 20% of the remainder of earnings. This type of tax

can be described as:

equitable.

179. Multiple Choice: Suppose an income tax is levied on 0%…

Question Suppose an income tax is levied on 0% of the first $1,000, 10% of the next $9,000,

and 20% of the remainder of earnings. How much tax would Miranda have to pay if

she earned $20,000?

$3,000

180. Multiple Choice: A tax that takes a larger share of th…

Question A tax that takes a larger share of the income of high-income taxpayers than of low–

income taxpayers is called a:

Answer sales tax.

181. Multiple Choice: A tax that rises less than in proport...

Question A tax that rises less than in proportion to income is described as:

Answer progressive.

Points: 0

182. Multiple Choice: A progressive tax:

Question A progressive tax:

183. Multiple Choice: Suppose Governor Meridias decides to …

Question Suppose Governor Meridias decides to initiate a state-level income tax. The first

$50,000 of household income is tax-free, while any income above $50,000 is taxed

at 10%. A household earning $50,000 has a marginal tax rate of ________ and an

average tax rate of ________.

Answer 10%; 10%

184. Multiple Choice: Suppose Governor Meridias decides to …

Question Suppose Governor Meridias decides to initiate a state-level income tax. The first

$50,000 of household income is tax-free, while any income above $50,000 is taxed

at 10%. The marginal tax rate for a household earning $75,000 is:

Points: 0

185. Multiple Choice: If the government follows an income t...

Question If the government follows an income tax system in which personal income up to

and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%,

and income over $50,000 is taxed at 25%, a family earning $60,000 of income will

pay ________ in personal taxes.

186. Multiple Choice: Paying a tax of $20 on an income of $...

Question Paying a tax of $20 on an income of $100, a tax of $15 on an income of $200, and

a tax of $12 on an income of $300 is an example of a:

Answer flat tax.

187. Multiple Choice: A tax that takes a fixed percentage o...

Question A tax that takes a fixed percentage of income, regardless of the level of income, is

a:

188. Multiple Choice: Paying a tax of $10 on an income of $...

Question

Points: 0

Paying a tax of $10 on an income of $100, a tax of $20 on an income of $200, and

a tax of $30 on an income of $300 is an example of a:

Answer regressive tax.

189. Multiple Choice: A tax that takes a higher percentage ...

Question A tax that takes a higher percentage of income as income rises is:

Answer proportional.

190. Multiple Choice: Paying a tax of $10 on an income of $...

Question Paying a tax of $10 on an income of $100, a tax of $25 on an income of $200, and

a tax of $60 on an income of $300 is an example of a:

191. Multiple Choice: A tax that takes a ________ percentag…

Question A tax that takes a ________ percentage of income as income ________ is a

________ tax.

Answer lower; rises; progressive

Points: 0

192. Multiple Choice: A progressive tax is one levied on:

Question A progressive tax is one levied on:

Answer a fixed percentage of income.

193. Multiple Choice: Taxes paid on the wages received from...

Question Taxes paid on the wages received from a job are called:

sales tax.

194. Multiple Choice: Annual taxes paid on the value of a h…

Question Annual taxes paid on the value of a home are called:

Answer income tax.

profits tax.

195. Multiple Choice: Taxes paid on the purchase of most co…

Question Taxes paid on the purchase of most consumption goods are called:

Answer income tax.

Points: 0

196. Multiple Choice: The government imposes a tax of $1,00...

Question The government imposes a tax of $1,000 per household to fund a new public

swimming pool. This tax is an example of a:

flat tax.

197. Multiple Choice: Paying a tax of $15 on an income of $...

Question Paying a tax of $15 on an income of $200, a tax of $10 on an income of $300, and

a tax of $8 on an income of $400 is an example of a:

Answer constant-rate tax.

198. Multiple Choice: A tax that takes a _______ is ________.

Question A tax that takes a _______ is ________.

larger share of the income of high–income taxpayers than of low-income

taxpayers; regressive

Points: 0

199. Multiple Choice: Paying a tax of $20 on an income of $...

Question Paying a tax of $20 on an income of $200, a tax of $40 on an income of $400, and

a tax of $50 on an income of $500 is an example of:

Answer a regressive tax.

200. Multiple Choice: A tax that takes a _______ percentage...

Question A tax that takes a _______ percentage of income as income rises is _______.

Answer higher; proportional

201. Multiple Choice: Paying a tax of $20 on an income of $...

Question Paying a tax of $20 on an income of $200, a tax of $40 on an income of $300, and

a tax of $80 on an income of $400 is an example of a:

constant-rate tax.

202. Multiple Choice: Which of the following best describes...

Question Which of the following best describes a regressive tax?

Answer A tax that takes a higher percentage of income as income rises.

Points: 0

203. Multiple Choice: A regressive tax is one that takes a:

Question A regressive tax is one that takes a:

Answer fixed percentage of income.

204. Multiple Choice: In analyzing the impact of a progress…

Question In analyzing the impact of a progressive tax system, economists focus on the

________ tax rate.

Answer average

205. Multiple Choice: The percentage of an increase in a ta...

Question The percentage of an increase in a taxpayer‘s income that is taxed away is the:

lower tax rate.

206. Multiple Choice: If the marginal tax rate is greater t...

Question

Points: 0

If the marginal tax rate is greater than the average tax rate, we know that the tax

system is:

Answer proportional.

207. Multiple Choice: If the marginal tax rate is less than...

Question If the marginal tax rate is less than the average tax rate, we know that the tax

system is:

Answer proportional.

208. Multiple Choice: If the marginal tax rate equals the a…

Question If the marginal tax rate equals the average tax rate, we know that the tax system

is:

regressive.

209. Multiple Choice: In 2008, the Social Security tax was ...

Question In 2008, the Social Security tax was levied on incomes only up to $102,000. Which

of the following statements about this tax is correct?

Answer A worker with an annual income of $50,000 and one with an annual income of

$100,000 would pay the same dollar amount of payroll tax.

Points: 0

210. Multiple Choice: Income tax rates are such that Mr. R....

Question Income tax rates are such that Mr. R. Hood earns $35,000 per year and pays

$7,000 in taxes, while Mr. G. Gisbourne earns $1 million per year and pays

$200,000 in taxes. This tax is:

Answer progressive.

211. Multiple Choice: An efficient way to finance the provi...

Question An efficient way to finance the provision of city services (such as street cleaning)

would be to charge all city residents a lump-sum tax. Such a tax would be:

Answer progressive.

212. Multiple Choice: Suppose Governor Meridias initiates a...

Question Suppose Governor Meridias initiates a payroll tax of 10% on all income up to

$50,000. Any income above $50,000 is not taxed. This payroll tax will be:

Answer progressive.

proportional.

Points: 0