Wealth: A. Tends to be distributed much less equally than income. B. Is the market value of assets. C. All of the above. D. Represents a stock of potential purchasing power.
Suppose Mr. Lee has total income of $120,000, has taxable income of $90,000, and pays $30,000 in taxes. Considering the information presented, what is Mr. Lee's effective tax rate? A. 66.7 percent. B. 25 percent. C. 72 percent. D. 33.33 percent.
If the percentage of income paid in taxes increases as income rises, then the tax system is: A. Regressive. B. Progressive. C. Marginal. D. Nominal.
If Alejandra makes $46,000 per year as a nurse and pays $7,000 in taxes while Emily makes $46,000 per year as a high school teacher and pays $6,500 in taxes, this is an example of: A. Horizontal inequity. B. Marginal inequity. C. A flat tax. D. Vertical inequity.
Free trade results in reduced prices and increased consumption. True False
If tax elasticity of supply is 0.8 and tax rates increase by 10 percent, the quantity of labor supplied would: A. Decrease by 1.25 percent. B. Decrease by 8 percent. C. Increase by 1.25 percent. D. Increase by 8 percent.
By the year 2030 in the United States there will be ____ workers for every retired person. A. 8. B. 1. C. 4. D. 2.
1. C. All of the above
(All the statements represents wealth.)
2. B. 25 percent.
(Effective tax rate = (30,000/120,000)*100 = 25%)
3. B. Progressive.
(As tax paid increases with income then tax is progressive.)
4. A. Horizontal inequity
(As they are earning same but paying different taxes so there is
horizontal inequity.)
5. True
(With free trade each country can specialize in the good of its
comparative advantage which reduces prices and increase
consumption.)
6. D. Increase by 8 percent
(Elasticity = Percentage change in labor supply/Percentage change
in tax rates.
So, Percentage change in labor supply = (0.8)*10 = 8%)
7. D. 2.
(There will be 2 workers for every retired person by 2030 in the
US)
Get Answers For Free
Most questions answered within 1 hours.