Econ 001 - Principles of Microeconomics » Summer 2019 » Quiz 5

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Question #1
Price ceilings typically result in ________.
A.   shortages
B.   price equilibrium
C.   excess supply
Question #2
A price ceiling creates ________ when it is set ________ the equilibrium price.
A.   excess supply -- below
B.   excess demand -- below
C.   excess demand -- above
Question #3
If the government sets floor prices for wheat or corn that guarantee farmers an above-market price for that product, the most probable result would be what?
A.   the market would suffer shortages.
B.   over production.
C.   more suppliers would leave the market.
Question #4
When supply is inelastic and demand is elastic, the tax incidence falls on ________.
A.   the producer
B.   the consumer
C.   government
Question #5
When supply is elastic and demand is inelastic, the tax incidence falls on the ________.
A.   consumer
B.   producer
C.   government
Question #6
The demand for cigarettes is highly inelastic. This suggests that the incidence of a higher tax on cigarettes will fall primarily on:
A.   Cigarette sellers.
B.   Government.
C.   Cigarette consumers.
Question #7
When supply is inelastic and demand is elastic, the tax incidence falls on ________.
A.   government
B.   the consumer
C.   the producer
Question #8
Tom earns $35,000 per year. The income tax rate on incomes below $20,000 is 10 percent. The rate on income between $20,001 and $35,000 is 15 percent. Which of the following is/are true?,,
A.   Tom’s marginal income tax rate is 15 percent.
B.   The income tax is regressive.
C.   The income tax is progressive.
Question #9
A flat tax:,,
A.   may not be realistic because most actual proposals exempt lower income households from paying taxes.
B.   is a progressive tax.
C.   imposes a single, identical tax rate on the income of all taxpayers.
Question #10
Property taxes are:,,
A.   generally considered to be progressive.
B.   generally considered to be regressive.
C.   imposed based on ownership of assets such as real estate and autos.
Question #11
Which of the following example(s) describe a proportional tax?
A.   Medicare payroll tax of 2.9% of income for everyone, regardless of how much they earn
B.   Social Security tax rate of 6.2% on earned income below $117,000 and 0% on income earned above $117,000
C.   Income tax with a 10% tax rate on low income households and 20-30% tax rates on higher income households
Question #12
Which of the following example(s) describe a progressive tax?
A.   Social Security tax rate of 6.2% on earned income below $117,000 and 0% on income earned above $117,000
B.   Income tax with a 10% tax rate on low income households and 20-30% tax rates on higher income households
C.   Medicare payroll tax of 2.9% of income for everyone, regardless of how much they earn

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