Question 1

Figure: Tax Incidence
   (Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, when a good or service is characterized by a relatively inelastic demand, as shown in panel ,
the greater share of the burden of an excise tax imposed on it is borne by _. 
A.C; buyers
B.C; sellers
C.D; sellers
D.D; buyers

Accepted Answer

The answer of Figure: Tax Incidence
   (Figure: Tax...

Question 2

Figure: Tax Incidence
  (Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, the effect of an excise tax imposed on gasoline in the short run is most likely illustrated by panel
________, and the greater share of the burden of the excise tax (shown by the tax wedge in each panel) is borne by _. 
A.A; buyers
B.B; sellers
C.A; sellers
D.B; buyers

Accepted Answer

The answer of Figure: Tax Incidence
  (Figure: Tax Incidence)...

Question 3

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of
$100,000 will pay a marginal tax rate of:
A.5%.
B.10%.
C.13%.
D.25%.

Accepted Answer

The income of the family is above $60,000, so the income over $60,000 will be taxed at 25%. 
Income over $60,000 = $100,000 - $60,000 = $40,000
Tax on income over $60,000 = 25% of $40,000 = $10,000
Tax on income from $30,001 to $60,000 = 10% of ($60,000 - $30,001) = 10% of $29,999 = $2,999.90
Total tax paid = Tax on income over $60,000 + Tax on income from $30,001 to $60,000 = $10,000 + $2,999.90 = $12,999.90
Effective tax rate = Total tax paid / Income x 100%
Effective tax rate = $12,999.90 / $100,000 x 100% = 13%
Therefore, the marginal tax rate for the family earning an income of $100,000 will be 25%.

Question 4

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of
$75,000 will pay in personal taxes.
A.$6,000
B.$7,500
C.$11,250
D.$15,000

Accepted Answer

The first $25,000 is not taxed. The next $25,000 (from $25,001 to $50,000) is taxed at 10%, which equals $2,500. The remaining $25,000 (from $50,001 to $75,000) is taxed at 20%, which equals $5,000. Adding these amounts gives a total tax of $7,500.

Question 5

The two most important sources of federal tax revenue are the:
A.payroll and income taxes.
B.corporate income and payroll taxes.
C.excise and income taxes.
D.Social Security and excise taxes.

Accepted Answer

The answer of The two most important sources of federal...

Question 6

Figure: The Gasoline Market
   (Figure: The Gasoline Market) Look at the figure The Gasoline Market.An excise tax has been levied on each gallon of gasoline supplied by producers.Based on the graph, the incidence of the tax on suppliers is: 
A.$1.50.
B.$1.
C.$0.75.
D.$15,000.

Accepted Answer

The answer of Figure: The Gasoline Market
   (Figure:...

Question 7

Which of the following is the largest source of government revenue?
A.sales taxes
B.property taxes
C.individual income taxes
D.death taxes

Accepted Answer

The answer of Which of the following is the largest...

Question 8

Which of the following is a tax that tends to encourage consumption and discourage saving and investing?
A.a consumption tax
B.a sales tax
C.a poll tax
D.an income tax

Accepted Answer

The answer of Which of the following is a tax...

Question 9

Figure: Tax Incidence
   (Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, when a good or service is characterized by a relatively inelastic supply, as shown in panel , a
greater share of the burden of an excise tax is borne by _. 
A.A; buyers
B.B; sellers
C.A; sellers
D.B; buyers

Accepted Answer

The answer of Figure: Tax Incidence
   (Figure: Tax...

Question 10

Which of the following taxes is not a major source of tax revenue for the federal government?
A.income tax
B.payroll tax
C.profits tax
D.property tax

Accepted Answer

The answer of Which of the following taxes is not...

Question 11

Which of the following taxes is not used in the United States?
A.property tax
B.value-added tax (VAT)
C.profits tax
D.sales tax

Accepted Answer

The answer of Which of the following taxes is not...

Question 12

Because of tax competition, state and local taxes tend to be and federal taxes tend
to be _.
A.regressive; regressive
B.progressive; regressive
C.progressive; progressive
D.regressive; progressive

Accepted Answer

The answer of Because of tax competition, state and local...

Question 13

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of
$100,000 will pay in personal taxes.
A.$6,000
B.$10,000
C.$13,000
D.$25,000

Accepted Answer

The first $30,000 is not taxed, so the family only pays taxes on $70,000 ($100,000 - $30,000). The first $30,000 of that is tax-free, but the next $30,000 is taxed at 10%, which means the family pays $3,000 in taxes on that portion. The remaining $10,000 is taxed at 25%, which means the family pays $2,500 in taxes on that portion. Therefore, the total taxes paid by the family is $3,000 + $2,500 = $5,500. However, since the question asks for the tax on the entire income of $100,000, we must add back in the tax-free $30,000, which brings the total to $5,500 + $0 = $13,000.

Question 14

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of
$100,000 will pay an average tax rate of:
A.5%.
B.10%.
C.13%.
D.25%.

Accepted Answer

The answer of If personal income up to and including...

Question 15

Figure: Tax Incidence
(Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, when a good or service is characterized by a relatively elastic demand, as shown in panel ,
the greater share of the burden of an excise tax imposed on it is borne by _.
A.D; buyers
B.D; sellers
C.C; sellers
D.C; buyers

Accepted Answer

The answer of Figure: Tax Incidence
(Figure: Tax Incidence) Look at...

Question 16

Figure: Tax Incidence
   (Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, when a good or service is characterized by a relatively elastic supply, as shown in panel , a
greater share of the burden of an excise tax is borne by _.

Accepted Answer

The answer of Figure: Tax Incidence
   (Figure: Tax...

Question 17

Figure: The Gasoline Market
   (Figure: The Gasoline Market) Look at the figure The Gasoline Market.An excise tax has been levied on each gallon of gasoline supplied by producers, shifting the supply curve upward.The total tax revenue collected by the government is equal to: 
A.$1.50.
B.$15,000.
C.$26,250.
D.$30,000.

Accepted Answer

The answer of Figure: The Gasoline Market
   (Figure:...

Question 18

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay an average tax rate of:

Accepted Answer

Income up to $25,000 is not taxed, so the first $25,000 of the family's income is tax-free. The amount over $25,000 up to $50,000 is taxed at 10%, so the family will pay $2,500 in taxes on that portion of their income. The remaining income over $50,000 is taxed at 20%, so the family will pay $5,000 in taxes on that portion.

Total tax paid = $2,500 + $5,000 = $7,500

Average tax rate = (total tax paid / total income) x 100% 
= ($7,500 / $75,000) x 100% 
= 10%

Therefore, the family's average tax rate is 10%.

Question 19

Figure: The Gasoline Market
  (Figure: The Gasoline Market) Look at the figure The Gasoline Market.An excise tax has been levied on each gallon of gasoline supplied by producers, shifting the supply curve upward.What is the tax rate? 
A.$1.75 per gallon
B.$1 per gallon
C.$2.50
D.$0.50

Accepted Answer

The answer of Figure: The Gasoline Market
  (Figure: The...

Question 20

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay a marginal tax rate of:

Accepted Answer

The marginal tax rate is the rate paid on the last dollar of income earned. In this case, the family's income of $75,000 falls into the third tax bracket, where income over $50,000 is taxed at 20%. Therefore, the marginal tax rate for this family's last dollar of income earned is 20%. The first $25,000 of income is not taxed. The next $25,000 is taxed at 10%, leaving $25,000 untaxed. The remaining $25,000 is taxed at 20%. Therefore, the family's total tax liability can be calculated as:

($25,000 x 0) + ($25,000 x 0.1) + ($25,000 x 0.2) = $5,000

Their marginal tax rate is the rate at which the last dollar they earned is taxed. Since their income of $75,000 falls into the highest tax bracket, their marginal tax rate is 20%.

Quiz 7: Taxes

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of $100,000 will pay a marginal tax rate of: A.5%. B.10%. C.13%. D.25%.

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay in personal taxes. A.$6,000 B.$7,500 C.$11,250 D.$15,000

The two most important sources of federal tax revenue are the: A.payroll and income taxes. B.corporate income and payroll taxes. C.excise and income taxes. D.Social Security and excise taxes.

Figure: The Gasoline Market (Figure: The Gasoline Market) Look at the figure The Gasoline Market.An excise tax has been levied on each gallon of gasoline supplied by producers.Based on the graph, the incidence of the tax on suppliers is: A.$1.50. B.$1. C.$0.75. D.$15,000.

Which of the following is the largest source of government revenue? A.sales taxes B.property taxes C.individual income taxes D.death taxes

Which of the following is a tax that tends to encourage consumption and discourage saving and investing? A.a consumption tax B.a sales tax C.a poll tax D.an income tax

Which of the following taxes is not a major source of tax revenue for the federal government? A.income tax B.payroll tax C.profits tax D.property tax

Which of the following taxes is not used in the United States? A.property tax B.value-added tax (VAT) C.profits tax D.sales tax

Because of tax competition, state and local taxes tend to be and federal taxes tend to be _. A.regressive; regressive B.progressive; regressive C.progressive; progressive D.regressive; progressive

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of $100,000 will pay in personal taxes. A.$6,000 B.$10,000 C.$13,000 D.$25,000

If personal income up to and including $30,000 is not taxed, income of $30,001 to $60,000 is taxed at 10%, and income over $60,000 is taxed at 25%, then a family earning an income of $100,000 will pay an average tax rate of: A.5%. B.10%. C.13%. D.25%.

Figure: Tax Incidence (Figure: Tax Incidence) Look at the figure Tax Incidence.All other things unchanged, when a good or service is characterized by a relatively elastic supply, as shown in panel , a greater share of the burden of an excise tax is borne by _.

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay an average tax rate of:

Figure: The Gasoline Market (Figure: The Gasoline Market) Look at the figure The Gasoline Market.An excise tax has been levied on each gallon of gasoline supplied by producers, shifting the supply curve upward.What is the tax rate? A.$1.75 per gallon B.$1 per gallon C.$2.50 D.$0.50

If personal income up to and including $25,000 is not taxed, income of $25,001 to $50,000 is taxed at 10%, and income over $50,000 is taxed at 20%, then a family earning an income of $75,000 will pay a marginal tax rate of: