Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 5.A, Problem 3ADQ
To determine
The Efficiency under democracy.
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Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, each citizen must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn. So given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be __________ and his average tax rate for his entire income will be _________________. a. 50 percent; 50 percent. b. 50 percent; less than 50 percent. c. 10 percent; 50 percent. d. 10 percent; less than 50 percent.
Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, all
citizens must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn.
Given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be
rate for his entire income will be
and his average tax
O 10 percent; 50 percent
O 50 percent; less than 50 percent
O 10 percent; less than 50 percent
O 50 percent; 50 percent
1. A city has three equal-sized groups of people: (1) Type A people consistently prefer more public school expenditure; (2) Type B people prefer high levels of public school expenditure to low levels, and they prefer low levels to medium levels; (3) Type C people most prefer medium levels to low levels, and they prefer low levels to high levels.
Will majority voting generate consistent outcomes in this case? (Hint: you should check if there are cycles in outcomes by changing the order of voting)
A.True
B. False
2. Suppose Florida government has asked you to design and evaluate the effectiveness of an education voucher program. What is wrong with simply comparing the educational performance of those receiving vouchers with those who do not receive vouchers? Explain.
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