Bundle: Principles of Microeconomics, 7th + LMS Integrated Aplia, 1 term Printed Access Card
7th Edition
ISBN: 9781305242463
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 12, Problem 4CQQ
To determine
The application on which the policy of toll tax is based.
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6. All of the following are sources of inefficiency except:
a. public goods.
b. the invisible hand.
c. external costs.
d. price ceilings.
answer. (b. the invisible hand.)
9. Which of the following is the most correct statement about tax burdens?
a. A tax burden falls most heavily on the side of the market that is closer to unit elastic.
b. A tax burden falls most heavily on the side of the market that is elastic.
c. A tax burden is distributed independently of relative elasticities of supply and demand.
d. A tax burden falls most heavily on the market that is inelastic.
answer (c. A tax burden is distributed independently of relative elasticities of supply and demand.)
16. The Coase theorem suggests that:
a. the government should be actively involved in solving the problem of externalities.
b. private parties may be able to solve the problem of externalities on their own.
c. high transaction or bargaining costs are necessary in solving the problem of externalities.
d.…
The government raises revenue through taxation to pay for the services it provides.
a. True
b. False
A toll is a tax on citizens who use toll roads. Thispolicy can be viewed as an application ofa. the benefits principle.b. horizontal equity.c. vertical equity.d. tax progressivity
Chapter 12 Solutions
Bundle: Principles of Microeconomics, 7th + LMS Integrated Aplia, 1 term Printed Access Card
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- 95. Homeowners a. benefit from several loopholes. b. must pay tax on the “income” of living in a house. c. have no particular advantages in the tax system. d. are subject to double taxation.arrow_forwardWhich of the following is not a canon of taxation? Pick a,b,c, or d a. Equity b. General Acceptability c. Convenience d. Certaintyarrow_forwardc. A progressive tax d. A regressive tax QUESTION 3 Corporate profits are a. taxed to pay for Medicare. b. exempt from taxes. c. included in payroll taxes. d. taxed twice, once as profit and once as dividends. QUESTION 4 A value-added tax or VAT is a tax on a. retail purchases only. b. pollution. c. all stages of production of a good. d. wholesale purchases only. QUESTION 5 Table 12-17 INCOME $50,000 100,000 200,000 AMOUNT OF TAX $12,500 (25%) $25,000 (25%) $50,000 (25%) TAX Aarrow_forward
- 1. "Taxes are necessary evil". Based on what we discussed in class, discuss and argue why this is true. Then, describe in details how we can build an efficient taxation system?arrow_forwardPlease no written by hand solutions 1.Discuss the five properties of a good tax system 2. Discuss why there are inefficiencies in the consumption of public good. 3. Discuss the key functions of the government.arrow_forwardA. Economic profit is an indication that consumers are willing to pay more for a good or service being offered. True False B. An advantage of tradable permits over emission taxes is that no knowledge of marginal abatement costs is needed to ensure that the tax rate is optimal. the regulator sets the price of permits. the regulator does not have to determine how much to reduce pollution levels. the regulator must set the optimal tax rate.arrow_forward
- 1. What is the difference between private and social costs?2. How can the government intervene to force consumers to internalize external costs associated with: a. negative externalities? b. positive externalities?3. Differentiate between public good and common resources.4. What are the advantages of a flat tax system?arrow_forward3.Define progressive tax.asaparrow_forwardThe tax system is used to reduce income inequality through the use of _____ taxes. Select one: a. progressive b. regressive c. efficiency offset d. proportionalarrow_forward
- What is a market-failure rationale for the government investing in transportation and infrastructure, for example roads, highways, bridges and tunnels? a. Government policy acts to correct for the under-provision of private goods by the private, unregulated market. b. Government policy acts to correct for the over-provision of private goods by the private, unregulated market. c. Government policy acts to correct for the over-provision of public goods by the private, unregulated market. d. Government policy acts to correct for the under-provision of public goods by the private, unregulated market.arrow_forwardIf a tax system is well designed: Select one: a. then efficiency can be improved only by making the system less fair. b. it maximizes fairness. c. it maximizes efficiency. d. it maximizes efficiency and equity. I think its darrow_forwardA progressive tax is: A. designed to take a greater percentage of the income of lower-income groups than of higher-income groups B. based on the benefits received principle. C. not based on the ability to pay principle D. designed so that everybody would be charged the same percentage of their income as taxes. E. designed to take a larger percentage of the income of higher-income groups than of lower-income groupsarrow_forward
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