罗森 财政学 第七版(英文版) 配套习题及答案Chap012.doc

Test Bank to accompany Rosens Public Finance, Seventh EditionChapter 12CHAPTER 12 - Taxation and Income DistributionMultiple-Choice Questions1.Statutory incidence of a tax deals witha)the amount of revenue left over after taxes.b)the amount of taxes paid after accounting for inflation.c)the person(s) legally responsible for paying the tax.d)the amount of tax revenue generated after a tax is imposed.e)none of the above.2.Taxesa)are mandatory payments.b)are necessary for financing government expenditures.c)do not directly relate to the benefit of government goods and services received.d)are all of the above.3.General equilibrium refers toa)examining markets without specific information.b)finding equilibrium from general information.c)pricing goods at their shadow price.d)all of the above.e)none of the above.4.A demand curve that is perfectly inelastic isa)horizontal.b)vertical.c)at a 45 degree angle.d)parallel to the X-axis.5.In 2002, the top 1% of all income earners paid _ percent of federal taxes.a) 1.0b) 4.1c)20.6d)24.9e)33.36.A tax on suppliers will cause the supply curve to shifta)up.b)down.c)right.d)left.e)in none of the above directions.7.A monopoly has _ seller(s) in the market.a)0b)1c)3d)manye)all of the above8.An ad valorem tax isa)given as a proportion of the price.b)Latin for “buyer beware.”c)identical to a unit tax.d)computed using the “inverse taxation rule.”9.An industry where the capital-labor ratio is relatively high is characterized asa)capital intensive.b)labor intensive.c)income intensive.d)market intensive.e)none of the above.10.Demand for cigarettes isa)relatively elastic.b)relatively inelastic.c)constant over time.d)greater among wealthier people.11.When marginal tax rates are constant,a)the change in taxes paid is the same as the change in income.b)the change in taxes paid is greater than the change in income.c)the change in taxes paid is less than the change in income.d)there are no taxes.e)none of the above.12.The tax-induced difference between the price paid by consumers and the price received by producers isa)the tax difference.b)the tax wedge.c)the statutory incidence.d)the supply side effect.e)the substitution effect.13.An oligopoly has _ sellers in the market.a)0b)1c)3d)manye)all of the above14.A tax on consumers will cause the demand curve to shifta)right.b)left.c)up.d)down.e)in none of the above directions.15.Partial equilibrium isa)exactly like general equilibrium.b)studying only the supply side of the market.c)studying individual markets.d)examining the demand side of the market.Discussion Questions1.Consider a monopolist who has a total cost curve of: TC=7X+(1/2)X2. The market demand equation is Xd=386-(1/2)P.a)What are the equilibrium quantity, equilibrium price, and profits in this market?b)Suppose that a unit tax of $1 is placed on the monopolist. What happens to the equilibrium quantity, equilibrium price, and profits? How much tax revenue does the government generate?c)Suppose that the same unit tax of $1 is placed on consumers. What happens to the equilibrium quantity, equilibrium price, and profits? How much tax revenue does the government generate?d)What can be said about the taxes?2.Refer to Figure 12.2 in your textbook. Suppose the original before-tax demand curve is Xd = 49 P/2. Suppose further that supply is X = P/2 1. Now suppose a $3 unit tax is imposed on consumers.a)What is the beforetax equilibrium price and quantity?b)What is the aftertax equilibrium quantity?c)How much tax revenue is raised?3.From Question 2 above, calculate the economic incidence incurred by producers and the economic incidence incurred by consumers.4.Suppose that demand is perfectly elastic. Supply is normal and upward sloping. What is the economic incidence of a unit tax placed on suppliers?5.Suppose there is a market that has market demand characterized as X = 30 P/3. Suppose further that market supply can be written as X = P/2 2.a)Find the equilibrium price and quantity in this market.b)If a unit tax of $16 is imposed on good X, what are the equilibrium price, quantity, and tax revenue in the market?c)Suppose an ad valorem tax of 30 percent is imposed on good X. The after-tax demand equation would be X = 30 P/2. Now find the equilibrium price, quantity, and tax revenue in the market.d)What can be said about the amount of tax revenue generated under each taxing scheme, and why?True/False/Uncertain Questions1.A unit tax is a fixed amount per unit of a commodity sold.2.Regressive tax systems are bad.3.In a general equilibrium model, a tax on a single factor in its use only in a particular sector can affect returns to all factors in all sectors.4.Due to capitalization, the burden of future taxes may be borne by current owners of an inelasticallysupplied, durable commodity such as land.5.Even with a tax, the price that consumers pay will be higher than what producers receive.6.Ad valorem taxes create tax wedges just like unit taxes.7.After a price change, the substitution effect will be the same as the income effect.8.Marginal tax rates supply reliable measures of tax progressiveness.9.Unit taxes cause shifts, while ad valorem taxes cause pivots.10.A lump sum tax is one for which the individuals liability does not depend on behavior.Essay Questions1.In the press, there has been a considerable amount of attention given to the notion of corporations being taxed. Explain how it is that a tax on a business could be borne entirely by consumers.2.Why is it the case that a commodity tax on goods like food and shelter is sometimes seen as being regressive?3.What types of goods might have demand curves that are vertical, and why?Answers to CHAPTER 12 - Taxation and Income DistributionAnswers to Multiple-Choice Questions1.c2.a3.e4.b5.d6.d7.b8.a9.a10.b11.e12.b13.c14.b15.cAnswers to Discussion Questions1.a)X* = 153, P* = $466, p = $58522.5b)X* = 152.8, P* = $466.4, p = $58,369.6, Tax Rev. = $152.8c)X* = 152.8, P* = $465.4, p = $58,369.6, Tax Rev. = $152.8d)The tax revenue generated is the same, whether it is levied on the buyers or sellers.2.a)Setting beforetax demand equal to supply gives X* = 24, with P* = $50.b)The aftertax demand curve is now P = 95 2X. Setting the aftertax demand curve equal to supply gives X* = 23 .c)Tax revenue is the after-tax equilibrium quantity multiplied by the tax rate. Therefore, 3(23 ) = 69 .3.The after-tax consumer price is now $51.5. The after-tax producer price is now $48.5. The before-tax price was $50. The economic incidence for consumers is 1.5(23.25) = $34.875. For producers, it is 1.5(23.25) = $34.875.4.The economic incidence of the tax is paid entirely by the suppliers.5.a)Setting supply equal to demand and solving yields P* = $38.4 and X* = 17.2.b)The after-tax demand curve is now P = 74 3X. Setting after-tax demand equal to supply yields X* = 14, P* = $32 for suppliers, and P* = $48 for consumers. Tax revenue is $224.c)Setting the given after-tax demand equal to supply yields P* = $32