Question 1

MaKenna earns income of $80,000 per year.Her average tax rate is 40 percent.MaKenna paid $5500 in taxes on the first $30,000 she earned.What was the marginal tax rate on the rest of her income

Accepted Answer

A)  15 percent
B)  32 percent
C)  40 percent
D)  53 percentE) None of the above
F) A) and C)

Question 2

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned

Accepted Answer

A)  20 percent
B)  30 percent
C)  50 percent
D)  70 percentE) All of the above
F) A) and B)

Question 3

The share of provincial government spending on health has risen substantially over time.What is the most likely reason

Accepted Answer

A)  a rising poor population in the economy
B)  the elderly population growing more rapidly than the overall population
C)  immigration policy that continues to promote an influx of migrant farm workers
D)  hospital overcrowdingE) All of the above
F) None of the above

Question 4

Table 12-5 
-Refer to Table 12-5.What is the average tax rate for a person who makes $120,000

Accepted Answer

A)  23%
B)  33%
C)  43%
D)  63%E) A) and B)
F) A) and C)

Question 5

Which factor makes up part of the deadweight loss from taxing labour earnings

Accepted Answer

A)  People will work more.
B)  People will be reluctant to hire accountants to file their tax returns.
C)  People with low tax liabilities will universally be worse off than under some other tax policy.
D)  People will work less.E) B) and C)
F) C) and D)

Question 6

For provincial governments,what percent of spending does education account for

Accepted Answer

A)  5
B)  20
C)  21
D)  50E) A) and B)
F) A) and C)

Question 7

Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000.What is the average tax rate when income is $50,000

Accepted Answer

A)  10 percent
B)  12 percent
C)  25 percent
D)  30 percentE) A) and B)
F) A) and C)

Question 8

Table 12-2
 
-Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,what is the amount of surplus value that accrues to all four skiers from their weekend trip

Accepted Answer

A)  $105
B)  $113
C)  $140
D)  $265E) A) and B)
F) B) and C)

Question 9

The equity of a tax system concerns whether the tax burden is distributed equally among the population.

Accepted Answer

A) True 
 B)False

Question 10

When do taxes create deadweight loss

Accepted Answer

A)  when they distort behaviour
B)  when they cause the price of the product to increase
C)  when they don't raise sufficient government revenue
D)  when they cannot be computed easilyE) B) and D)
F) B) and C)

Question 11

The administrative burden of any tax system is part of the inefficiency it creates.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following causes our current tax system to resemble a consumption tax

Accepted Answer

A)  GST
B)  PST
C)  RRSP accounts
D)  savings accountsE) A) and B)
F) A) and D)

Question 13

In the absence of taxes,Janet would prefer to purchase a large sport utility vehicle (SUV) .However,the government has recently decided to place a $10,000 nuisance tax on SUVs.Which statement best reflects the effect of this tax if Janet decides to purchase a small economy car as a result of the tax

Accepted Answer

A)  Other people who choose to purchase SUVs will incur the cost of the deadweight loss of the tax.
B)  There are no deadweight losses as long as some people still choose to purchase SUVs.
C)  All deadweight losses are mitigated if there is a net decrease in air pollution.
D)  Janet is worse off, and her loss of welfare is part of the deadweight loss of the tax.E) None of the above
F) A) and C)

Question 14

What is the most efficient tax possible

Accepted Answer

A)  a marginal income tax
B)  a lump-sum tax
C)  a consumption tax
D)  a corporate profit taxE) A) and D)
F) B) and C)

Question 15

When taxes are justified on the basis that taxpayers receive specific government services,what do we know

Accepted Answer

A)  The tax is considered horizontally equitable.
B)  The tax burden is minimized.
C)  The tax satisfies the benefits principle.
D)  The tax is considered vertically equitable.E) None of the above
F) C) and D)

Question 16

What term is used when tax laws give preferential treatment to specific types of behaviour

Accepted Answer

A)  tax evasion
B)  a political payoff
C)  a tax loophole
D)  compensation for the benefit of societyE) A) and B)
F) A) and C)

Question 17

Scenario 12-1
Suppose Jeremy and Kelsey receive great satisfaction from their consumption of turkey.Kelsey would be willing to purchase only one slice and would pay up to $5 for it.Jeremy would be willing to pay $8 for his first slice, $6 for his second slice, and $2 for his third slice.The current market price is $2 per slice.
-Refer to Scenario 12-1.How much consumer surplus does Kelsey receive from consuming her slice of turkey

Accepted Answer

A)  $3
B)  $6
C)  $9
D)  $12E) All of the above
F) C) and D)

Question 18

When is one tax system less efficient than another

Accepted Answer

A)  when it places a lower tax burden on lower income families than on higher income families
B)  when it places a higher tax burden on lower income families than on higher income families
C)  when it raises a given amount of revenue at a higher cost to taxpayers
D)  when it raises a given amount of revenue at a lower cost to taxpayersE) A) and D)
F) A) and C)

Question 19

In practice,Canadian income tax is filled with special provisions that alter a family's tax based on its specific circumstances.

Accepted Answer

A) True 
 B)False

Question 20

What happens as a result of the marginal tax rate increasing as income rises

Accepted Answer

A)  Higher-income individuals, in general, pay a larger percentage of their income in taxes.
B)  Lower-income individuals, in general, pay a larger percentage of their income in taxes.?c.A disproportionately large share of the tax burden falls unjustly upon the poor.?d.Higher-income individuals pay the same percentage of their income in taxes as lower-income families.C) A) and B)
D) undefined

Exam 12: The Design of the Tax System

Table 12-5 -Refer to Table 12-5.What is the average tax rate for a person who makes $120,000

Correct Answer
verified

When taxes are justified on the basis that taxpayers receive specific government services,what do we know

Correct Answer
verified

Which of the following causes our current tax system to resemble a consumption tax

Correct Answer
verified

Table 12-2 -Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,what is the amount of surplus value that accrues to all four skiers from their weekend trip

Correct Answer
verified

When is one tax system less efficient than another

Correct Answer
verified

Correct Answer
verified

Which factor makes up part of the deadweight loss from taxing labour earnings

Correct Answer
verified

What term is used when tax laws give preferential treatment to specific types of behaviour

Correct Answer
verified

When do taxes create deadweight loss

Correct Answer
verified

In practice,Canadian income tax is filled with special provisions that alter a family's tax based on its specific circumstances.

Correct Answer
verified

The administrative burden of any tax system is part of the inefficiency it creates.

Correct Answer
verified

The share of provincial government spending on health has risen substantially over time.What is the most likely reason

Correct Answer
verified

What happens as a result of the marginal tax rate increasing as income rises

Correct Answer
verified

In the absence of taxes,Janet would prefer to purchase a large sport utility vehicle (SUV) .However,the government has recently decided to place a $10,000 nuisance tax on SUVs.Which statement best reflects the effect of this tax if Janet decides to purchase a small economy car as a result of the tax

Correct Answer
verified

For provincial governments,what percent of spending does education account for

Correct Answer
verified

MaKenna earns income of $80,000 per year.Her average tax rate is 40 percent.MaKenna paid $5500 in taxes on the first $30,000 she earned.What was the marginal tax rate on the rest of her income

Correct Answer
verified

The equity of a tax system concerns whether the tax burden is distributed equally among the population.

Correct Answer
verified

Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000.What is the average tax rate when income is $50,000

Correct Answer
verified

What is the most efficient tax possible

Correct Answer
verified

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned

Correct Answer
verified

Exam 12: The Design of the Tax System

Table 12-5 -Refer to Table 12-5.What is the average tax rate for a person who makes $120,000

Correct AnswerverifiedShow Answer

When taxes are justified on the basis that taxpayers receive specific government services,what do we know

Correct AnswerverifiedShow Answer

Which of the following causes our current tax system to resemble a consumption tax

Correct AnswerverifiedShow Answer

Table 12-2 -Refer to Table 12-2.If the price of a weekend ski pass is $138 and this price reflects the actual unit cost of providing a weekend of skiing,what is the amount of surplus value that accrues to all four skiers from their weekend trip

Correct AnswerverifiedShow Answer

When is one tax system less efficient than another

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which factor makes up part of the deadweight loss from taxing labour earnings

Correct AnswerverifiedShow Answer

What term is used when tax laws give preferential treatment to specific types of behaviour

Correct AnswerverifiedShow Answer

When do taxes create deadweight loss

Correct AnswerverifiedShow Answer

In practice,Canadian income tax is filled with special provisions that alter a family's tax based on its specific circumstances.

Correct AnswerverifiedShow Answer

The administrative burden of any tax system is part of the inefficiency it creates.

Correct AnswerverifiedShow Answer

The share of provincial government spending on health has risen substantially over time.What is the most likely reason

Correct AnswerverifiedShow Answer

What happens as a result of the marginal tax rate increasing as income rises

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For provincial governments,what percent of spending does education account for

Correct AnswerverifiedShow Answer

MaKenna earns income of $80,000 per year.Her average tax rate is 40 percent.MaKenna paid $5500 in taxes on the first $30,000 she earned.What was the marginal tax rate on the rest of her income

Correct AnswerverifiedShow Answer

The equity of a tax system concerns whether the tax burden is distributed equally among the population.

Correct AnswerverifiedShow Answer

Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000.What is the average tax rate when income is $50,000

Correct AnswerverifiedShow Answer

What is the most efficient tax possible

Correct AnswerverifiedShow Answer

Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned

Correct AnswerverifiedShow Answer

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