Econ Quiz 11/15

Question 1

Tax

Answer 1

compulsory charge paid to a government without an immediate direct quid pro quo (exchange)

Question 2

Tax base

Answer 2

the economic activity being taxed

Question 3

Tax rate

Answer 3

the amount of the tax

Question 4

Tax revenue

Answer 4

the money that is raised by the government from the tax (TB x TR)

Question 5

Ad Valorem tax

Answer 5

a tax based on value

Question 6

Excise tax

Answer 6

a tax based on quantity

Question 7

Statutory incidence

Answer 7

the breakdown of who is required by law to pay a tax

Question 8

Actual incidence

Answer 8

the breakdown of the economic burden of a tax

Question 9

Regressive tax

Answer 9

as income increases, the average tax rate decreases

Question 10

Average tax rate (ATR)

Answer 10

taxes paid divided by income

Question 11

Progressive tax

Answer 11

as income increases, the average tax rate increases

Question 12

Proportional tax

Answer 12

as income increases, the average tax rate stays equal

Question 13

Subsidy

Answer 13

a payment by a government to reduce the cost of production or reduce the cost of acquisition

Question 14

Excise subsidy

Answer 14

per-unit subsidy

Question 15

Ad valorem subsidy

Answer 15

subsidy according to value

Question 16

Government expenditures

Answer 16

money paid by the government for the subsidies