Please state whether the following claims are True, False, or Uncertain. No credit will be awarded without an explanation. Include a diagram/equation where appropriate. (a) Claim: Special interest groups compensate for the inefficiencies of the median voter outcome. (b) Claim: With respect to handling moral hazard, the government often has a comparative advantage relative to private insurance markets. (c) Claim: If the revenue from payroll taxes is spent to extend health insurance coverage to the uninsured, then there will be no deadweight loss in the labor market from the tax. (d) Claim: It is less efficient for the government to allow a tax deduction for charitable giving than for the government to spend directly on charity. (e) Claim: A non-refundable tax credit is more vertically equitable than a refundable tax credit of identical magnitudes. (f) Suppose that under conservative leadership, the US issues education vouchers. The average public school standardized exam scores immediately fall relative to private school performance. Claim: This indicates a failure of (predicted) competition between public and private education. (g) Claim: Conditional on means-testing a redistributive program, there is no advantage to further imposing categorical eligibility restrictions. (h) Suppose the federal government were to implement a revenue-neutral shift from an income tax to a consumption tax. Claim: Such a transition would improve both efficiency and equity measures. (i) Claim: Commodity taxes should be assigned so that only the most inelastically demanded good is taxed. Please state whether the following claims are True, False, or Uncertain. No credit will be awarded without an explanation. Include a diagram/equation where appropriate. (a) Claim: Special interest groups compensate for the inefficiencies of the median voter outcome. (b) Claim: With respect to handling moral hazard, the government often has a comparative advantage relative to private insurance markets. (c) Claim: If the revenue from payroll taxes is spent to extend health insurance coverage to the uninsured, then there will be no deadweight loss in the labor market from the tax. (d) Claim: It is less efficient for the government to allow a tax deduction for charitable giving than for the government to spend directly on charity. (e) Claim: A non-refundable tax credit is more vertically equitable than a refundable tax credit of identical magnitudes. (f) Suppose that under conservative leadership, the US issues education vouchers. The average public school standardized exam scores immediately fall relative to private school performance. Claim: This indicates a failure of (predicted) competition between public and private education. (g) Claim: Conditional on means-testing a redistributive program, there is no advantage to further imposing categorical eligibility restrictions. (h) Suppose the federal government were to implement a revenue-neutral shift from an income tax to a consumption tax. Claim: Such a transition would improve both efficiency and equity measures. (i) Claim: Commodity taxes should be assigned so that only the most inelastically demanded good is taxed
