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Exam 20: Public Finance: Expenditures and Taxes

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Question 21

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If the marginal tax rate is 25 percent, by how much must income have increased if your tax bill increases by $200?

A) $200
B) $50
C) $800
D) The amount cannot be determined.

E) A) and B)
F) A) and C)

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Question 22

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In 2016, the top 1 percent of all taxpayers in the United States paid what percentage of the federal income tax?

A) 26.7 percent
B) 37.3 percent
C) 45 percent
D) 58.2 percent

E) None of the above
F) A) and C)

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Question 23

Multiple Choice

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Refer to the income tax schedule given in the table. The tax represented is

Given supply, the more inelastic the demand for a product, the larger the portion of an excise tax that is shifted to consumers.

In the diagram, solid arrows reflect real flows, while broken arrows are monetary flows. Flow (6) might represent

Economists agree that corporations always shift the corporate income tax to consumers by raising product prices.

About two-thirds of all federal spending is for national defense.

One difference between sales and excise taxes is that

Assume you pay a tax of $6,000 on a taxable income of $40,000. If your taxable income were $50,000, your tax payment would be $7,000. This suggests that the tax is

The table shows four tax schedules for the given base of taxable income. Which of the tax schedules is a proportional tax schedule throughout?

Which of the following is the most important source of tax revenue for state governments?

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the efficiency (or deadweight) loss due to the excise tax?

(Advanced analysis) The equations for the demand and supply curves for a particular product are P = 10 − 0.4 Q and P = 1 + 0.4 Q, where P is price and Q is quantity expressed in units of 100. After an excise tax is imposed on the product, the supply equation is P = 2 + 0.4 Q. Government's revenue from this tax is

In the figure, S is the before-tax supply curve and Sₜ is the supply curve after an excise tax is imposed. The efficiency loss of this tax will be area

In determining one's personal income tax, taxable income is

The graph illustrates the market for a product on which an excise tax has been imposed by government. How much is the total amount of tax revenue going to the government?

The table gives data for the market for a product. If an excise tax of $3 per unit is imposed on this product, the tax revenue for the government will be

Refer to the income tax schedule given in the table. The tax represented is

The tax that is most difficult to shift to others would be

Education is the largest expenditure item for state governments as well as local governments in the U.S.