1. A price ceiling creates ________ when it is set ________ the equilibrium price.

2. A government collects $600 billion annually in tax revenue. Each year it allocates $35 billion to healthcare and $25 billion for education. What percentage of annual tax revenue is allocated to these two categories of government spending?

	a.	26%
	b.	14%
	c.	10%
	d.	17%

3. The ability to pay principle of taxation holds that:

	a.	people who receive more of the benefit of government spending should pay more taxes.
	b.	people with more income should pay more taxes.
	c.	taxes should be proportional to income.

4. Microsoft pays corporate income tax to the federal government based on the company's ________.

	a.	proportional tax rate
	b.	profits
	c.	progressive tax rate
	d.	holdings

5. When does a balanced budget occur?

	a.	when government spending equals government tax revenues
	b.	when government spending exceeds government tax revenues
	c.	when the rate of increase in government spending equals the rate of increase in government tax revenue collections