US18L2

  • 1

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    The ________is the percentage of an additional dollar of income that is paid in tax, and the _______ is the percentage of income that is paid in tax.

    progressive tax; proportional tax
    average tax rate; marginal tax rate
    proportional tax; progressive tax
    marginal tax rate; average tax rate

  • 2

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    In the interest of the median voter, income taxes are _____________________.

    progressive
    average
    regressive
    proportional

  • 3

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    Because of the free-rider problem, ____________________________.

    too little of a good would be made by private provision
    there is an increase in deadweight loss
    there is an efficient allocation of resources
    too much of a good would be made by private provision

  • 4

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    An increase in property taxes in a neighborhood ________ supply and _______demand for property.

    decreases; increases
    decreases; has no effect on
    decreases; decreases
    increases; has no effect on

  • 5

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    There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ______________________.

    total benefit minus total cost is a maximum
    total benefit is maximized
    marginal benefit and marginal cost are increasing at a constant rate
    marginal benefit minus marginal cost is a maximum

  • 6

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    Two rival political parties will most likely ____________________.

    propose similar legislation
    propose higher tax rates
    capture approximately 50 percent of the votes each
    propose legislation that appeals to the wealthy

  • 7

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    An increase in income taxes _______ employment, _______ the after-tax wage rate, and _______ deadweight loss.

    decreases; decreases; increases
    increases; decreases; decreases
    increases; increases; decreases
    decreases; increases; increases

  • 8

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    Bike paths and conservation areas are examples of ___________________.

    local public goods
    deadweight loss
    total benefit exceeding total cost
    marginal benefit exceeding marginal cost

  • 9

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    When an excise tax is added to a commodity, the price usually ___________ and the equilibrium quantity _________.

    increases; decreases
    decreases; increases
    decreases; decreases
    increases; increases

  • 10

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    By taxing commodities that have _______, the deadweight loss created by the tax is _______.

    few substitutes; minimized
    many complements; maximized
    few substitutes; maximized
    few complements; minimized

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