12. The two principles of tax fairness are: A) the minimize distortions principl
ID: 1168737 • Letter: 1
Question
12. The two principles of tax fairness are:
A) the minimize distortions principle and the maximize revenue principle.
B) the benefits principle and the ability-to-pay principle.
C) the proportional tax principle and the ability-to-pay principle.
D) the equity principle and the efficiency principle.
13. The benefits principles says:
A) the amount of tax paid depends on the measure of value.
B) those who benefit from public spending should bear the burden of the tax that pays for that spending.
C) those with greater ability to pay should pay more tax.
D) those who benefit from the tax should pay the same percentage of the tax base as those who do not benefit.
14. A tax that rises less than in proportion to income is described as: (Hint: This would have more of a negative impact on lower income earners vs. higher income earners.)
A) progressive. B) proportional. C) regressive. D) structural.
15. The U.S. income tax is _______, while the payroll tax is _______. (Hint: Think income tax vs. Social Security tax.)
A) progressive; progressive C) regressive; progressive
B) progressive; regressive D) regressive; regressive
16. Who is currently leading in the polls to receive the Republican nomination as that party’s presidential candidate?
A) Qasem Soleimani
B) Abu Bakr al-Baghdadi
C) Osama bin Laden
D) Donald J. Trump
17. The single most important thing I’ve learned in class this term is:
A) stay in frickin’ school
B) stay in school and make a plan for life and my career
C) the use of cheese for skyscraper construction
D) both A and B above
18. Market equilibrium occurs when:
A) there is no incentive for prices to change in the market.
B) quantity demanded equals quantity supplied.
C) the market clears.
D) all of the above occur.
19. Excess supply occurs when: (Hint: Draw a supply and demand graph! Think about price ceilings and floors and the graphs of these we discussed in class.)
A) the price is above the equilibrium price.
B) the quantity demanded exceeds the quantity supplied.
C) the price is below the equilibrium price.
D) both b and c occur.
20. The single most important thing I’ve learned in class this term is:
a. stay in school and look into either a study abroad or internship experience
b. stay in school and make a plan for life and my career
c. the untimely demise of Cecil the lion in Zimbabwe
d. both a. and b. above
21. According to the textbook definition, mainstream microeconomics generally focuses on
a. how individual decision-making units, like households and firms, make economic decisions.
b. the performance of the national economy and policies to improve this performance.
c. the relationship between economic and political institutions.
d. the general level of prices in the national economy.
22. Which of the following is the best summary of the three basic economic questions?
a. Who? Why? and When?
b. What? How? and Who?
c. When? Where? and Why?
d. What? Where? and Who?
23. Which of the following is not one of the basic economic resources?
a. land
b. labor
c. capital
d. cheese
e. entrepreneurship
24. The largest country in the Arabian Peninsula and home to the cities of Riyadh, Jeddah, Mecca, and Medina is:
a. The Kingdom of Saudi Arabia
b. California
c. Spain
d. Kentucky
25. T or F: The law of demand explains the upward slope of the supply curve.
26. In economics, a "marginal" value refers to:
a. the value associated with an important or marginal activity.
b. a value entered as an explanatory item in the margin of a balance sheet or other accounts.
c. the value associated with one more unit of an activity.
d. a value that is most appropriately identified in a footnote.
27. A government mandated price that is below the market equilibrium price is sometimes called. . . (Hint: Draw a graph again and think about what the government is trying to accomplish.)
a. a price ceiling.
b. a price floor.
c. a market clearing price.
d. a reservation price.
28. T or F: Entering the US job market without any education or training is crazy and should be avoided. Stay in frickin’ school, baby!
29. The law of demand states that, other things equal:
a. as the price increases, the quantity demanded will increase.
b. as the price decreases, the demand curve will shift to the right.
c. as the price increases, the quantity demanded will decrease.
d. none of the above.
30. The law of supply says:
a. other things equal, the quantity supplied of a good is inversely related to the price of the good.
b. other things equal, the supply of a good creates its own demand.
c. other things equal, the quantity supplied of a good is positively related to the price of the good.
d. none of the above.
31. A perfectly inelastic demand curve is:
a. horizontal.
b. downward sloping.
c. upward sloping.
d. vertical.
32. A trade-off involves weighing costs and benefits.
a. true
b. false
33. A perfectly elastic demand curve is:
a. horizontal.
b. downward sloping.
c. upward sloping.
d. vertical.
34. The second most important thing I’ve learned in class this term is:
a. despair is not an option
b. Donald J. Trump’s hair is real
c. the use of cheese for skyscraper construction
d. none of the above
35. T or F: Virtually any news item has important economic dimensions and consequences.
36. T or F: When studying economics, always think in terms of historical context.
37. This popular Asian country is populated by 1.3 billion people, has the world’s second largest economy, and uses a language that’s been in continuous use for nearly 5,000 years:
a. Kentucky
b. California
c. Spain
d. China
38. T or F: The top priority in my life right now should be my education and an internship experience. Without these, the job market is going to kick my butt!
39. Which of the following is a key side effect generated by the use of price ceilings?
a. black markets
b. products with too high of quality
c. an excess supply of a good
d. too many resources artificially channeled into the production of a good
40. Which of the following is NOT one of the four basic principles for understanding individual choice?
a. Resources are scarce.
b. The real cost of something is the money that you must pay to get it.
c. “How much?” is a decision at the margin.
d. People usually take advantage of opportunities to make themselves better off.
41. A hot mixture of pan drippings, flour, and water is commonly known as:
a. interest rates and expected future real GDP.
b. interest rates and current real GDP.
c. inflation and expected future real GDP.
d. gravy.
42. The example we used in class when discussing the inefficiency of quantity quotas was:
a. Uber
b. General Electric
c. AT&T
d. the KSU marching band
43. The term we learned in class signifying a key method of non-price competition is:
a. excess supply chain management
b. arbitrage
c. swashbuckling
d. product differentiation
44. When discussing market failure and the role of regulation in class, which company/product did we use as an example?
a. Pabst Blue Ribbon
b. JetBlue
c. Blue Bell
d. Blue Apron
45. Governments may place relatively high sales taxes on goods such as alcohol and tobacco because:
a. such taxes are a significant source of revenue
b. such goods exhibit inelastic demand
c. such taxes may discourage use of these products
d. all of the above
46. When discussing the cost of higher education in class, which country did we cite as an example of one that offers free college for qualifying students?
a. USSR
b. Rhodesia
c. Czechoslovakia
d. Germany
47. Which of the following is not an example of market failure we discussed in class?
a. externalities
b. public goods
c. fungible goods
d. common pool resources
e. equity
48. T or F: As we discussed in class, the real reason why the US has lost jobs to China is the “most favored nation” (MFN) trading status granted to China by the US back in the 1980s.
49. The dude we talked about in class who coined the expression “invisible hand” and promoted self-interest and competition in his famous book “The Wealth of Nations” is:
a. Abu Bakr al-Baghdadi
b. Ali Khamenei
c. Donald J. Trump
d. Adam Smith
50. When studying for your final exams and attempting to allocate your limited time among several subjects in order to maximize your course grades (recall, we talked about this example during the first week of class), you’re almost unconsciously engaging in a form of:
a. fraud
b. miscellaneous serendipity
b. mitosis
d. marginal analysis
Explanation / Answer
(12) Option (D)
Equity of taxation and efficiency of tax incidence are two main principles of fairness.
(13) Option (B)
Benefit principle states that tax will be imposed based on how much benefit the tax payer derives.
(14) Option (C)
Regressive taxation is one, where tax rate rises in a lower proportion of increase in income.
(15) (A)
Both are progressive taxation.
(16) Question belongs to Political Science
(17) Not an Economics question!
(18) (D)
In equilibrium, demand equals supply, thus clearing the market & resulting in a stable price.
(19) (A)
When price is higher than equilibrium price, demand < supply, resulting in excess supply.
(20) Not an economics question!
(21) (A)
(22) (B)
3 questions: What is produced, how it is produced & who produces it.
(23) (D)
Cheese is a product & not an economic resource
(24) It's Political science, not Economics
(25) FALSE.
Law of supply explains the shape of supply curve.
(26) (C)
Marging value refers to the additional quantity of something generated, from one unit increase in some other parameter.
(27) (B)
A price set below equilibrium price is a price floor, used to limit the upward movement of price especially for essential goods.
(28) Not Economics.
(29) (C)
As price increases (decreases), quantity demanded decreases (increases)
(30) (C)
Law of supply states, as price increases (decreases), quantity supplied increases (decreases).
NOTE: There are too many questions clubbed together, out of which the first 20 questions are answered.
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