Economics Module 8 Flashcards
Adam Smith opposed government taxation and spending.
False
Compare the five countries represented in Figure 8.4. Which of the five countries allocated the largest percentage of its budget toward health and education expenditures?
United States of America
Compare the five countries represented in Figure 8.4. Which of the five countries allocated the largest percentage of its budget to general public services?
El Salvador
In Figure 8.5, of the items listed below, on average the single largest expenditure item for state and local governments across the U.S. is _________.
education
According to Figure 8.7, the largest single source of state and local government tax revenue in the U.S. is _______.
the property tax
According to Figure 8.6, the largest single source of federal government tax revenue in the U.S. is _____________.
taxes on income, profits, and capital gains
Compare the five countries represented in Figure 8.6. Which of the five countries received the largest percentage of its tax revenue from taxes on goods and services (sales taxes)?
El Salvador
Compare the five countries represented in Figure 8.6. Which of the five countries receives the largest percentage of its tax revenue from taxes on income, corporate profits, and capital gains?
United States of America
According to Figures 8.8 and 8.9, what is the largest source of personal income for residents of the U.S.?
Wages and salaries
In 2020, a person in the U.S. who earns $25,000 pays a marginal tax rate of ______________% into the Social Security Program, while a person who earns $140,000 pays a marginal tax rate of ______________% into the Social Security Program.
6.2, 0
Sales taxes are which of the following?
An important source of revenue for state and local governments but not very important for the federal government in the U.S.
In the U.S. in 2020, an individual who earns $225,000 a year (after standard deductions and exemptions) faces a marginal tax rate of ______________.
35%
In the U.S. in 2020, an individual who earns $225,000 a year (after standard deductions and exemptions) faces an average tax rate of ______________.
24%
The market equilibrium quantity without the $4 excise tax is ______________ units. The market equilibrium quantity with the $4 excise tax is ______________ units. The change in equilibrium quantity due to the $4 excise tax is ______________ units.
60, 50, -10
The equilibrium price consumers pay for the product without the $4 excise tax is ______________. The equilibrium price consumers pay with the $4 excise tax is ______________. The change in equilibrium price due to the $4 excise tax is ______________.
$12, $14, $2
The market equilibrium quantity without the 40% sales tax is ______________ units. The market equilibrium quantity with the 40% sales tax is ______________ units. The change in equilibrium quantity due to the 40% sales tax is ______________ units.
60, 50, -10
The equilibrium price consumers pay for the product without the 40% sales tax is ______________. The equilibrium price consumers pay with the 40% excise tax is ______________. The change in equilibrium price due to the 40% sales tax is ______________.
$12, $14, $2
Two facets of taxes that economists often use to compare taxes are _________.
efficiency and fairness
What happens to the total amount of consumer surplus in a market if the cost of production rises? The total amount of consumer surplus:
decreases
What happens to the total amount of producer surplus in a market if the demand for the product increases? The total amount of producer surplus:
increases
Compare the effects of a given tax on goods with elastic demands and inelastic demands in terms of amount of revenues raised from the taxes. With an elastic demand, ______ revenue will be raised than with an inelastic demand.
less
With an elastic demand, there will be a ____________ in allocative efficiency then there will be with an inelastic demand.
greater decrease
As the elasticity of demand increases, all other things being equal, the impact of a tax on the change in the
equilibrium quantity does which of the following?
Gets larger
Economists have estimated the elasticity of demand for the following (fairly) common goods:
If the same excise tax were imposed on the sale of each item, which market would experience the largest deadweight loss?
Fresh tomatoes