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 supply curve is steeper than the demand curve
Answer:
Local projects funded by federal money are a ___ share of the federal budget.
A. large
B. medium
C. small
D.negative
Answer:
Having local governments compete to attract residents is generally ____.
A. harmful to potential residents and current residents
B. beneficial to potential residents and current residents
C. harmful to potential residents but beneficial to current residents
D. beneficial to potential residents but harmful to current residents
Answer:
If a firm borrows $100,000 to build in year 0, profit would be $110,000 in year 1. The
firm should do it if and only if the interest rate is less than:
A. 11%
B. 10%
C. 9%
D. 8%
Answer:
Under the U.S. income tax, there is ___.
A. always a marriage penalty
B. always a marriage bonus
C. sometimes a marriage penalty, and sometimes a marriage bonus
D. neither a marriage penalty nor a marriage bonus
Answer:
Foreign investors hold ___ of U.S. Treasury debt held by the public.
A. 15%
B. 25%
C. 35%
D. 45%
Answer:
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 rises from $0 to $120. The MD of a ton of carbon is
$96. The tax per ton is T.
Refer to Figure 2.2. If the price were $96, L would demand ___ and H would demand
___.
A. 24; 96
B. 48; 108
C. 72; 96
D. 72; 108
Answer:
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 9.1. In the middle block, the consumption tax rate must be set at
______.
A. 2/7 = 29%
B. 3/7 = 43%
C. 4/7 = 57%
D. 5/7 = 71%
Answer:
Under employer play-or-pay, an employer must ___.
A. provide insurance or pay employee medical bills
B. provide insurance or pay a tax
C. regulate the use of medical care by employees or pay the bills
D. regulate the fees of providers and the use of medical care or pay the bills
Answer:
With a corporate and individual income tax, dividends are taxed ___ and interest is
taxed ___.
A. once; not at all
B. twice; not at all
C. once; once
D. twice; once
Answer:
With a 40% tax on savers’ capital income, the height of each point on the original S
curve is __% of the height of each point on the new S’ curve which is directly ___ the
original S curve.
A. 40%; above
B. 60%; above
C. 40%; below
D. 60%; below
Answer:
Refer to Figure 3.1. The reason for summing the MBs is that protection from the wall is
A. rival.
B. nonrival.
C. excludable.
D.nonexcludable.
Answer:
Coase said that the rancher would have an incentive to restrain his cattle if the property
right is assigned to
A. the farmer, not the rancher.
B. the rancher, not the farmer.
C. either the farmer or the rancher.
D. neither the farmer nor the rancher.
Answer:
Suppose a private firm promises a legislator a job with high pay to vote the way the
firm wants. This
is an example of ___.
A. courtesy
B. lobbying
C. logrolling
D. corruption
Answer:
Figure 2.1 shows the supply and demand diagram for steel. Environmental damage per
unit produced is $60.
Refer to Figure 2.1. Which area shows the net loss to society from production of units
121 through 200?
A. HIJK
B. IJK
C. HIK
D. HIJ
Answer:
Figure 2.1 shows the supply and demand diagram for steel. Environmental damage per
unit produced is $60.
Refer to Figure 2.1. The loss to consumers (ignoring the environmental gain) from the
decrease in steel due to the $60 tax equals area ____.
A. HIJK ($4,800)
B. IJK ($2,400)
C. HIK ($2,400)
D. HIJ ($0)
Answer:
The ___ tax raises about 45% of federal revenue.
A. personal income
B. corporate income
C. payroll
D. sales
Answer:
The estate tax also taxes gifts ____.
A. received after death
B. given after death
C. received earlier in life
D. given earlier in life
Answer:
The unemployment compensation benefit is about ___ of previous wage income for the
average worker.
A. 20%
B. 40%
C. 60%
D. 80%
Answer:
If employers buy health insurance for employees, employers eventually
A. pay the same wages and set the same prices and dividends for stockholders.
B. pay the same wages and dividends but set higher prices.
C. pay lower wages and set higher prices.
D. pay lower wages and set the same prices and dividends.
Answer:
A problem for a cap and trade plan is that
A. polluters may incur high abatement costs in the short run.
B. polluters will incur high abatement costs in the long run.
C. it can’t raise revenue.
D. it won’t eliminate pollution.
Answer:
In a society in which households differ significantly in income, two processes occur
simultaneously that affect where households live: the Tiebout process and the
separation process. Explain each.
Answer:
According to the traditional approach, a property tax shifts ___ the ___ curve for homes
and thereby ____ the price of homes.
Answer:
Stern used a ____ rate than Nordhaus, and this resulted in a ____ present value than
Nordhaus computed.
Answer:
If the state matching rate m is 3.0, then the district’s price is what percent?
Answer:
Refer to Figure 3.1. At a wall thickness smaller than the social optimum, the ___ is ___
than the ___.
Answer:
Assume there is no externality. The inefficiency from the tax equals the area of a ___ to
the ___ of the intersection of the original D and S curves.
Answer:
If the supply curve is horizontal, e is the elasticity of demand, and t is the tax rate, the
efficiency loss equals ___.
Answer:
For the average person, getting health insurance through an employer is cheaper than
buying it individually because
Answer:
For many retirees, the ratio of home value to income is relatively ___ so they would
prefer that their town use ____ tax.
Answer: