Imagine Two Households each with an income of $65,000 per year. Household A consists of two married individuals both 51 years old with one child who is now 27 years old and out of the house. Household B consists of two married individuals who are 31 years old and have three young children, two of which attend day care. The Government in implementing policies to effect Tax Fairness will concentrate on: O The Benefits Principle The Marginal Tax Rate of each Household Each Household's individual Laffer Curve O Which Household has the greater economic capacity

suppose Lena makes $50000 per year and Mariah makes $65000 per year. If each pays $5000 in taxes: What would their individual tax rates be? Would you describe this tax system as proportional, progressive, or regressive?

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1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) Demand Supply A 56.00 40.00 B DE 24.00 F QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. Result Per-unit tax Value Price producers receive after tax Equilibrium quantity before tax (?) In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus before the tax is imposed Deadweight loss after the tax is imposed Consumer surplus after the tax is imposed A B C D E F ☐ ☐ ☐

4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bottle) 100 90 80 20 10 0 0 Supply Demand 14 28 42 56 70 84 98 112 126 140 QUANTITY (Bottles) Graph Input Tool At this tax amount, the equilibrium quantity of gin is Market for Gin Suppose the government imposes a $20-per-bottle tax on suppliers. Quantity (Bottles) Demand Price (Dollars per bottle) Tax (Dollars per bottle) 56 60.00 20.00 Supply Price (Dollars per bottle) bottles, and the government collects $ ? 40.00 in tax revenue.

If there is a $3 tax, what is the CS, PS, tax revenue, TS, and deadweight loss? Include  graph!  Does welfare go up or down? Explain.

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The graph shows befire-tax, where the equilibrium is at 25.  When the government levies the tax of 30 on X, price consumer have to pay changes to 35, and prince sellers recieve changes to 5. And at Ps:5, quantity is at 10. What is the consumers’ tax incidence and sellers’ tax incidence, when comaparing the chnage in the prices from before-tax equilibrium price 25??

Which type of tax takes a larger percentage of income from high-income earners than from low-income earners? A. Regressive tax B. Proportional tax C. Progressive tax D. Flat tax

Suppose that a country has 20 million households. Ten million are poor households that each have labor market earnings of $20,000 per year and 10 million are rich households that each have labor market earnings of $80,000 per year. If the government enacted a marginal tax of 10 percent on all labor market earnings above $20,000 and transferred this money to households earning $20,000 or less, would the incomes of the poor rise by $8,000 per year? O A. No. Workers in rich and poor households would work less because of the marginal tax. O B. Yes. 10% of $80,000 is $8,000; therefore, $8,000 from each rich household would be transferred to each poor household. O C. There is not enough information to determine household behavior in this case. O D. No. Only workers in rich households would work less because of the marginal tax.