81) Suppose there is only one movie theatre in a town and the equilibrium price and quantity for movie admissions is $7 and 940 visits per week. Now suppose the government imposes a tax of $3 per movie admission, and the new equilibrium price and quantity are $8.75 and 750 visits per week. What is the direct burden of this tax?
A) $937.50
B) $1312.50
C) $1645
D) $2250
E) There is not enough information to know.
82) Suppose an additional "special" tax of $0.10 per litre is imposed on the sale of gasoline in one province. Prior to the tax the price was $1.30 per litre and 10 million litres of gasoline are sold per day. After imposition of the tax, the new equilibrium price and quantity are $1.38 per litre and 9.6 million litres per day. What is the direct burden of this "special" tax?
A) $40 000 per day
B) $768 000 per day
C) $192 000 per day
D) $ 960 000 per day
E) There is not enough information to know.
83) Consider a 10% excise tax that is similarly applied to good X, which has a price elasticity of 2.7, and to good Y, that has a price elasticity of 0.6. We can predict that the excess burden of this tax in the market for good X will be ________ the excess burden in the market for good Y.
A) no larger than
B) equal to
C) smaller than
D) larger than
E) 2.1 times the size of
84) In 2009, public expenditure by all levels of government (federal, provincial, and municipal) combined accounted for approximately what percentage of Canadian GDP?
A) 16
B) 26
C) 36
D) 40
E) 56
85) An example of a government expenditure that is a transfer payment is
A) employment-insurance (EI) payments.
B) construction costs of a new government-owned airport.
C) salaries of welfare case workers.
D) education payments.
E) payments made to the Canadian International Development Agency (CIDA).
86) Which of the following expenditures by Canada's federal government is considered a government purchase?
A) employment-insurance payments
B) Old Age Security payments
C) equalization payments
D) child tax benefit
E) payment of the Prime Minister's salary
87) One of the guiding principles in Canada's system of "fiscal federalism" is that
A) only provinces that are "federalist" should receive fiscal assistance from the federal government.
B) each province is an independent fiscal entity.
C) the tax base should be approximately equal in each of the provinces and territories.
D) the true cost of provision of public goods to the various provinces of Canada should be recovered in tax revenue from the province receiving the benefit.
E) individuals should have approximately the same access to public services, at broadly comparable tax rates, no matter where they live.
88) Which of the following best explains the essence of Canada's system of fiscal federalism?
A) the constitutional delegation of fiscal responsibilities between federal, provincial, territorial and municipal governments
B) the law that determines the formula for Canada's system of equalization payments
C) the coordination on taxing and spending that is necessary between the federal, provincial, territorial and municipal governments to meet the needs of all Canadian residents
D) the division of powers between the federal government and the provincial governments
E) the coordination necessary for joint collection of federal and provincial income taxes
89) Consider two provinces in Canada - Province A and Province B. Province A has a per capita income of $67 000 per year while Province B has a per capita income of $38 000 per year. In the absence of any coordination on taxing and spending, could these two provinces provide equivalent public services?
A) Yes - if the government of Province B supplemented the incomes of all residents by $29 000 per year.
B) Yes - if Province B had much higher taxes than Province A.
C) Yes - if residents in Province A had less need for services than those in Province B.
D) No - the costs of services would be higher in Province A.
E) No - the costs of services would be higher in Province B.
90) The Canadian federal government's system of "equalization payments"
A) are made out of the federal government's general revenues to provinces with below-average tax capacity.
B) are made by provinces with above-average tax capacity to the federal government.
C) are made to provinces with inadequate "tax room."
D) are made by richer provinces to poorer provinces in the form of no-interest loans.
E) were established in 1867 between the original provinces of Canada as a means of equalizing living standards across the country.
