Question 1 Housing construction is generally believed to be an industry of constant costs. In the long run, which of the following is true if a $10 per square foot tax on housing construction is collected directly from builders? Question 2 Which of the following is true about a lump-sum tax? Question 3 The demand for medical care is very inelastic. If a 10-percent tax is levied on the sale of medical services and is collected from medical-care providers, then: Question 4 2 out of 2 points Currently, a 10-cent per gallon tax is levied on gasoline consumption. The tax is increased to 20 cents per gallon. The excess burden of the tax will: Answer Question 5 Suppose an economy is comprised of only two markets: one for food and the other for housing. A tax on food used to finance transfer payments is likely to: Answer Question 6 A $0.30 per unit tax is imposed on a good that reduces the quantity supplied and demanded by 1000 units. What is the deadweight loss (ignore price elasticities)? Answer Question 7 The efficiency-loss ratio relative to tax is: Answer Question 8 2 out of 2 points The current price of compact discs, which are traded in perfectly competitive markets, is $10. A $1 per unit tax is levied on the discs. Annual record sales decline from five million to four million as a result of the tax. Assuming that the income effect of the tax-induced price change is negligible, the excess burden of the tax will be: Answer Question 9 2 out of 2 points If a lump-sum tax is imposed, the slope of the new budget line relative to the budget line prior to the tax: Answer Question 10 If the price elasticity of supply of labor is equal to 0.5 and the price elasticity of demand for labor is “�2, then which of the following is likely to result from a tax on labor earnings? Answer Question 11 A lump-sum tax: Answer Question 12 2 out of 2 points Other things being equal, the more inelastic the demand for a taxed good, Answer Question 13 2 out of 2 points Differential tax incidence measures the effect: Answer Question 14 2 out of 2 points Most studies of tax incidence assume that taxes on labor income and other input services are borne entirely by the workers and other input owners that supply the services. This implies that the: Answer Question 15 Viewed from origin a price distorting tax creates a new budget line with a ______ slope relative to the budget line without the tax. Answer Question 16 2 out of 2 points Which of the following can contribute to a decrease in national saving? Answer Question 17 The total dollar value of the federal debt outstanding is: Answer Question 18 A government’s internal debt is: Answer Question 19 Other things being equal, a government budget surplus: Answer Question 20 The largest portion of the net federal debt outstanding is owed to: Answer Question 21 2 out of 2 points Which of the following is true about the federal government budget balance in the United States? Answer Question 22 The federal budget has been in deficit: Answer Question 23 As a result of government borrowing to cover deficits, citizens increase the supply of savings to provide themselves with funds to pay anticipated increases in future taxes. Then it follows that increased government borrowing will: Answer Question 24 The high employment deficit is estimated at $100 billion. Assuming that the economy is operating below full employment and that it will not overheat during the year, Answer Question 25 High-employment deficit or surplus is: Answer Question 26 The National Income and Product Accounts budget balance reflects: Answer Question 27 0 out of 2 points A bond that is backed by the tolls collected from a bridge to be constructed from the proceeds of the bond is an example of: Answer Question 28 2 out of 2 points The debt of state and local governments is mostly: Answer Question 29 2 out of 2 points Evidence of “crowding out”� in the market for loanable funds at a rate of 8% could be: Answer Question 30 2 out of 2 points The federal government, its agencies, and the Federal Reserve System: Answer
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