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 ___.
A. employers
B. workers
C. consumers
D. stockholders
Answer:
Residential zoning works by making it illegal to ____.
A. move in if your recent tax return indicates you have low income
B. move in if your wealth (indicated by bank accounts, stocks, etc.) is low
C. build housing that low-income households can afford
D. build public playgrounds that are free to local residents
Answer:
A tax on consumers of X shifts the ___ curve ___.
A. supply; up
B. supply; down
C. demand; up
D. demand; down
Answer:
In 2007, U.S. GDP was _____, so net debt was ___ of GDP and gross debt was ___.
A. $9 trillion; 55%; 100%
B. $14 trillion; 37%; 63%
C. $14 trillion; 63%; 37%
D. $9 trillion; 37%; 63%
Answer:
For a family with two children, when the EITC phase down begins, for each additional
$100 of income, the EITC is reduced ___.
A. $10
B. $20
C. $30
D. $40
Answer:
Evaluating the accuracy of Laffer’s hypothesis requires comparing an actual to ____, so
a definitive (very certain) conclusion is _____.
A. an actual; possible
B. an actual; not possible
C. a hypothetical; possible
D. a hypothetical; not possible
Answer:
In the early 1990s, EITC expansion was supported by whom?
A. liberals only
B. conservatives only
C. liberals and conservatives
D. neither liberals nor conservatives
Answer:
The steeper (the more ____) are the D and S curves for a good, the ____ is the
efficiency loss from a tax.
A. elastic; greater
B. elastic; smaller
C. inelastic; greater
D. inelastic; smaller
Answer:
The state government gives a local government $10,000 to spend on activity X. This is
an example of ____.
A. a conditional block grant
B. an unconditional block grant
C. an open-ended categorical matching grant
D. a closed-ended categorical matching grant
Answer:
____ enable public schools to charge no tuition in contrast to private schools that must
charge tuition to _____.
A. Taxes; avoid poor children
B. Taxes; cover costs
C. Charitable contributions; avoid poor children
D. Charitable contributions; cover costs
Answer:
The RAND Health Insurance experiment found a price elasticity of __: a 50% reduction
in the price raised the quantity demanded by ___.
A. 0.0; 0%
B. 0.2; 10%
C. 0.5; 25%
D. 1.0; 50%
Answer:
Opponents of government insurance make which of these arguments:
(1) taxes would have to be raised substantially.
(2) government would over-regulate providers and over-restrict supply.
A. Just (1)
B. Just (2)
C. Both (1) and (2)
D. Neither (1) nor (2)
Answer:
Suppose instead of a tax the government sells 120 permits.
a) If the price were $48, L would demand ___ and H would demand ___.
b) If the price were $96, L would demand ___ and H would demand ___.
c) Thus, the price would turn out to be $___.
Answer:
The estate tax is a tax on a person’s ____ at death.
A. income
B. consumption
C. wealth
D. profit
Answer:
Under a property tax, the local government assigns ____ value to each property and
levies a tax with _____ on this value.
A. a market; graduated rates
B. a market; a single rate
C. an assessed; graduated rates
D. an assessed; a single
Answer:
The federal tax system as a whole is _____.
Answer:
The assessment ratio is the ratio of ______.
Answer:
This historical system was risky if ____ or ____ or ____.
Answer:
Under a tradable permits treaty where the total number of permits is 120, if country L is
unaffected by global warming, L should still agree to the treaty if it is given at least
____ permits. Why?
Answer:
According to the benefit approach, a property tax in itself would shift ___ the ____
curve for homes but providing public schools shifts ___ the ____ curve.
Answer:
Charging a Price versus Mandating or Subsidizing Clean Technologies
Economists advocate charging a price and oppose mandating or subsidizing clean
technologies. Give the economists’ reasons for opposing mandates or subsidies.
Answer:
In 2007, U.S. GDP was ____, so debt held by the public was ___ of GDP.
Answer:
What is the socially optimal quantity of a public good? Explain using a diagram.
Answer:
U.S. taxes are ___ of GDP while OECD taxes are ___ of GDP.
Answer: