Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 27, 2024

QUESTION 1 Suppose that the pretax price of gasoline is $1 per gallon. A tax of $0.50 is imposed and is paid by producers to

QUESTION 1

Suppose that the pretax price of gasoline is $1 per gallon. A tax of $0.50 is imposed and is paid by producers to the government. What must the gross price (price plus tax) of gasoline be after the tax so that the consumer tax burden is equal to the producer tax burden?

$0.50

$0.75

$1.00

$1.25

1 points

QUESTION 2

Suppose that the government starts taxing interest on savings. The substitution effect ________; the income effect __________.

induces the person to save more; induces the person to save more

induces the person to save more; induces the person to save less

induces the person to save less; induces the person to save more

does not affect savings; does not affect savings

1 points

QUESTION 3

Which of the following is provided only by private insurers?

workers' compensation

unemployment insurance

disability insurance

Answers A, B, and C are all correct.

1 points

QUESTION 4

If your average preretirement earnings were $30,000 per year and you receive $20,000 per year in retirement benefits, what is the replacement rate?

66.67%

20%

22.22%

33.33%

1 points

QUESTION 5

Which of the following is necessary for the Median Voter Theorem to be valid?

There can be only one issue that is important to voters

Candidates must not be willing to change their positions to win more votes

There cannot be more than two candidates running.

All of the above are necessary

A and C are necessary.

1 points

QUESTION 6

Suppose that you are in a 30% tax bracket and owe $4,000 in income taxes. You manage to reduce that amount by $2,000 because you paid $2,000 college tuition that year. Such a reduction in your tax bill must be due to a . .

tax credit.

standard deduction

exemption

itemized deduction

1 points

QUESTION 7

From a transaction, the difference between what consumers pay and what producers keep (after taxes are paid) is called:

statutory incidence.

tax wedge.

tax incidence.

producer burden.

1 points

QUESTION 8

In Figure 1, the externality is represented as a . . .

marginal consumption damage(mcd) subtracted from the private marginal cost

marginal production damage(mpd) added to the private marginal cost

marginal consumption benefit(mcb) subtracted from the private marginal cost

marginal production benefit (mpb) added to the private marginal cost

1 points

QUESTION 9

Which of the following considerations best characterize the justification for deducting some or all of the cost of attending professional development (training) seminars under the Haig-Simons comprehensive income definition?

externality considerations

ability-to-pay considerations

cost of earning income considerations

1 points

QUESTION 10

Which of the following is a criterion workers must meet to be eligible for unemployment benefits?

Answers C, D, and E are correct

Both D and E are correct (but not C).

They cannot have quit.

They cannot have been fired for poor performance or incompetence

They must be actively looking for a new job.

1 points

QUESTION 11

Which of the following were intended to reduce the cost of insurance premiums under the ACA?

Prohibit insurance companies from excluding applicants with pre existing conditions

Require all individuals (not covered by their employers) to purchase insurance

Extend Medicaid coverage to more people

who cares!

1 points

QUESTION 12

Provision of additional free public education (in the form of new public schools) in a community where both rich and poor families are present can lead to:

a reduction in private spending on education.

an increase in total spending on education.

a reduction of total spending on education.

Both A and B are correct

1 points

QUESTION 13

Environmentalists concerned with the wellbeing of future generations would recommend which of the following be done with respect to estimating the cost of hazardous materials cleanup that will be done years in the future

use a higher present value discount rate

use a lower present value discount rate

assume the cleanup will be delayed farther into the future

wrong answer (don't pick this one).

1 points

QUESTION 14

In a market with no government regulation, the equilibrium quantity of pollution reduction is reached when:

pollution reduction is zero.

the social marginal cost of reduction equals twice the marginal benefit of reduction.

the social marginal benefits of reduction equal its social costs.

the social marginal benefits of reduction equal its social marginal costs.

1 points

QUESTION 15

Of the OEDC counties surveyed in class, America spends the ________ portion of its GDP on healthcare

highest

Average

Lowest

Unable to tell

1 points

QUESTION 16

Suppose that someone wishes to address the problems with Social Security by requiring that those now exempt from Social Security enroll. That approach is equivalent to:

extending the base of taxable wages.

raising the retirement age.

lowering benefits for all recipients.

lowering benefits for higher-income groups.

1 points

QUESTION 17

From his six Principles of education, it can be concluded that Mann was mostly concerned about:

consumer sovereignty in the choice of material taught

productivity and wages

citizenship,

all of the above

1 points

QUESTION 18

Suppose that a market is in equilibrium and there is no government intervention in the market. If the private marginal cost of producing an item is $6 and the social marginal cost of production is $4, there must be a _____ of $2.

mcd

mpd

mcb

mpb

1 points

QUESTION 19

Of the OEDC counties surveyed in class, America ranks the ________ on the healthcare Human Development Index (HDI)

highest

Average

Lowest

Unable to tell

1 points

QUESTION 20

For which of the following groups is the risk hardest to predict, when they are insured as a risk pool? (assume that the age and gender of all members is known.)

A group consisting of the employees of a large company

A group consisting of the employees of a small company

A group of any size in which the members chose themselves to enroll in

Answers A, B, and C are correct.

1 points

QUESTION 21

Suppose that there is a flat 25% income tax but that the U.S. tax policy with respect to health insurance remains the same. If you make $25,000 per year and wish to buy a $2,000 health insurance policy, are you better off, worse off, or neither better nor worse off if your employer buys the policy? By how much?

better off; $500

worse off; $500

no better or worse off; $0

better off; $250

1 points

QUESTION 22

Government provides free public schools in part because education is believed to produce a positive externality. If the number of free public schools is increased...

shifts the supply curve of private education to the right.

shifts the supply curve of private education to the left.

shifts the supply curve for public education to the left.

shifts the supply curve for public education to the right

1 points

QUESTION 23

Which of the following is(are) purely non excludable and purely nonrival?

a road

cable television

broadcast (not satellite) radio

Answers A, B, and C are correct.

1 points

QUESTION 24

In the absence of an extension granted by congress, how long do unemployment benefits last in the US?

The duration is determined using a formula based on the recipient's previous earnings.

12 weeks

26 weeks

52 weeks

1 points

QUESTION 25

If it is physically possible for only one person to consume any given unit of a good, then that good is:

excludable.

nonexcludable.

rival.

nonrival.

1 points

QUESTION 26

Which of the following implies that smoking causes a negative externality?

Smokers die too early to collect Social Security benefits

Employers lower wages of all workers to account for smokers lowering the average of worker productivity.

Insurance companies adjust house insurance premiums for smoking status.

Both A and B are correct.

1 points

QUESTION 27

The purpose of the individual mandate in the Affordable Care Act (ACA) is to...

Reduce moral hazard

Reduce adverse selection

Make it financially feasible for insurance companies to accept people with pre existing conditions

Both B and C above

1 points

QUESTION 28

Which of the following is NOT true with respect to disability insurance (DI)?

DI claims are processed promptly and carefully, with decisions rarely being overturned by the courts

If granted, workers receive the same amount they would have received if they retired

DI benefits are largely untaxed.

DI program provides insurance against career-ending disabilities.

The DI acceptance ratethe share of those applying who are accepted into the programis only about one-third.

1 points

QUESTION 29

A tax levied on producers is fully shifted to consumers when:

demand is perfectly elastic.

supply is perfectly elastic.

supply is perfectly inelastic.

demand is perfectly inelastic.

1 points

QUESTION 30

Suppose that the (absolute value) of the elasticities of demand for apples, bananas, and peaches are 0.9, 1.6, and 0.8, respectively. Assume that the supply curves for these goods are identical and that an identical tax is levied on each good. Rank the products from highest to lowest in terms of the deadweight loss caused by the tax.

apples, bananas, peaches

peaches, bananas, apples

apples, peaches, bananas

bananas, apples, peaches

1 points

QUESTION 31

Suppose that a market is in equilibrium and there is no government intervention in the market. If the private marginal cost of producing an item is $4 and the social marginal cost of production is $6, what is the private marginal benefit of the item?

$10

1 points

QUESTION 32

Suppose that the pretax price of cigarettes is $3 per pack and the post-tax price of cigarettes is $4 per pack. The tax is $1.50 per pack and is paid by the retailers of cigarettes to the government. What is the consumer tax burden?

100 packs

$150

$1.50

1 points

QUESTION 33

Suppose there is a 20% tax on the first $15,000 of taxable income, a 30% tax on taxable income between $15,000 and $30,000, and a 40% tax on all taxable income above $30,000. There is a $3,000 exemption per person. What is the marginal tax rate for a single mother making $35,000 who has one child?

20%

30%

31.7%

40%

1 points

QUESTION 34

Which of the following statements about the tax treatment for home mortgages is true?

It is is a tax credit for those who have purchased their home.

It is a tax deduction that is not justified under the Haig-Simons definition of income.

Empirical research shows that the subsidy causes more people to buy homes.

Both A and C are true.

1 points

QUESTION 35

All other things equal, consumers bear more of a tax as demand becomes more _________ and supply becomes more ___________.

unit elastic; unit elastic

elastic; elastic

inelastic; inelastic

inelastic; elastic

1 points

QUESTION 36

Suppose that an individual retirement account (IRA) has a contribution limit of $3,000 per year and that prior to the passage of the law establishing IRAs, Hamilton was not saving any of his income. After the IRAs were established, Hamilton saved $2,000 per year. Which of the following statements is true?

The tax subsidy in the IRA has a marginal effect on Hamilton's saving.

The tax subsidy in the IRA has an inframarginal effect on Hamilton's saving.

The substitution effect exceeded the income effect.

All of the above are true

1 points

QUESTION 37

Which of the following refers to the debt incurred by the government because early generations of beneficiaries received much more in benefits than they paid in taxes?

early debt

legacy debt

program deficits

Social Security wealth