61.RefertoFigure8-23.IftheeconomyisatpointAonthecurve,thenadecreaseinthetaxratewill a.increasethedeadweightlossofthetaxandincreasetaxrevenue. b.increasethedeadweightlossofthetaxanddecreasetaxrevenue. c.decreasethedeadweightlossofthetaxandincreasetaxrevenue. d.decreasethedeadweightlossofthetaxanddecreasetaxrevenue. 62.RefertoFigure8-23.IftheeconomyisatpointBonthecurve,thenanincreaseinthetaxratewill a.increasethedeadweightlossofthetaxandincreasetaxrevenue. b.increasethedeadweightlossofthetaxanddecreasetaxrevenue. c.decreasethedeadweightlossofthetaxandincreasetaxrevenue. d.decreasethedeadweightlossofthetaxanddecreasetaxrevenue. 63.RefertoFigure8-23.IftheeconomyisatpointBonthecurve,thenasmalldecreaseinthetaxratewill a.increasethedeadweightlossofthetaxandincreasetaxrevenue. b.increasethedeadweightlossofthetaxanddecreasetaxrevenue. c.decreasethedeadweightlossofthetaxandincreasetaxrevenue. d.decreasethedeadweightlossofthetaxanddecreasetaxrevenue. Figure8-24.Thefigurerepresentstherelationshipbetweenthesizeofataxandthetaxrevenueraisedbythattax. 64.RefertoFigure8-24.Taxrevenuewould a.decreaseiftheeconomybeganatpointBandthenthetaxratewasdecreased. b.increaseiftheeconomybeganatpointFandthenthetaxratewasdecreased. c.decreaseiftheeconomybeganatpointCandthenthetaxratewasincreased. d.Alloftheabovearecorrect. 65.RefertoFigure8-24.ForaneconomythatiscurrentlyatpointDonthecurve,adecreaseinthetaxratewould a.decreaseconsumersurplus. b.decreaseproducersurplus. c.increasetaxrevenue. d.increasethedeadweightlossofthetax. 66.In2012,inTheWallStreetJournal,economistsPeterDiamondandEmmanuelSaezwrotethat,accordingtotheiranalysis,thefederalgovernment’staxrevenuewouldbemaximizedifthemarginalincometaxrateonindividualswiththehighestearningswereinorneartherangeof a.10percentto30percent. b.30percentto50percent. c.50percentto70percent. d.70percentto90percent. 67.In2012, inTheWallStreetJournal,economistsPeterDiamondandEmmanuelSaezassertedthefollowing: a.SinceWorldWarII,highertaxratesonindividualswiththehighestincomestendtobeassociatedwithhigher b.Theaveragefederalincometaxrateonthetop1percentofincome-earnersintheUnitedStatesmorethandoubledbetween1970and2010. c.A“reasonable”increaseinthetaxrateontopincomeearnersisallthatisneededtosolvelongtermfiscalproblemsfacedbytheUnitedStates. d.Alloftheabovearecorrect. 68.In2012,inTheWallStreetJournal,economistsEdwardPrescottandLeeOhanianassertedthat a.intheUnitedStates,whentheaverageworkerearns$100fromadditionalwork,heorshewillbeabletoconsumeanadditional$85worthofgoodsandservices. b.thetypicalAmericanhasalwaysworkedmorehoursperyearthanthetypicalFrenchmanandthetypicalGerman,despitevastlydifferenttaxratesinthosecountries. c.raisingtaxratesfromtheir2012levelswouldsignificantlyreduceU.S.economicactivity. d.raisingtaxratesfromtheir2012levelswouldsignificantlyincreasethefederalgovernment’staxrevenue. 69.Ina2012WallStreetJournalcolumn,economistsEdwardPrescottandLeeOhanianclaimedthat,inordertopromotefastereconomicgrowth,thegovernmentshould a.increasetaxratesonindividualswithhighincomes,andleavetaxratesonotherindividualsunchanged. b.equalizetaxratesonallindividuals,regardlessofhowmuchtheyearn. c.decreasetaxratesonincomeandincreasetaxratesonconsumption. d.increasetheafter-taxbenefitstosuccessfulentrepreneurshipandrisk-taking. Multiple Choice – Section 04: Conclusion 1.Whenthegovernmentimposestaxesonbuyersorsellersofagood,society a.losessomeofthebenefitsofmarketefficiency. b.gainsefficiencybutlosesequality. c.isbetteroffbecausethegovernment’staxrevenuesexceedthedeadweightloss. d.movesfromanelasticsupplycurvetoaninelasticsupplycurve. 2.Taxesarecostlytomarketparticipantsbecausethey a.transferresourcesfrommarketparticipantstothegovernment. b.alterincentives. c.distortmarketoutcomes. d.Alloftheabovearecorrect. 3.Taxesareofinterestto […]