What is a sumptuary tax? Give an explanation for how cigarette taxes could be justified as a sumptuary tax. Give an explanation for why cigarette taxation might not, in actuality, achieve the goal of sumptuary taxation. What will be an ideal response? ANSWER A sumptuary tax is a tax designed to discourage the consumption […]
Define the benefit principle. List two real world taxes that have the features of a tax based on the benefit principle. Why can’t the benefit principle be the sole principle of taxation? What will be an ideal response? ANSWER The benefit principle states that the people who benefit from the government’s expenditures should be […]
About 1.7 percent of elementary and secondary students were educated at home in 1999. a. True b. False ANSWER a
The above figure shows the isoquants for producing steel. Constant returns to scale are A) present when producing less than 10,000 tons. B) present when producing between 10,000 and 20,000 tons. C) present when producing more than 20,000 tons. D) never present. ANSWER B
In 1999, around 24 percent of college students attended private schools. a. True b. False ANSWER a
What is the ability-to-pay principle of taxation? List one strength and one weakness of the ability-to-pay principle as a guide to tax policy. What will be an ideal response? ANSWER The ability to pay principle states that individuals should pay taxes in proportion to their ability to pay. A major strength of the ability-to-pay […]
A unanimous decision rule is equivalent to market exchange in terms of efficiency. a. True b. False ANSWER b
Define horizontal and vertical equity and discuss the concepts with respect to legitimacy and usefulness. What will be an ideal response? ANSWER The principle of horizontal equity states that people with an equal ability to pay should pay the same tax while the principle of vertical equity states that people with a greater ability […]
The optimal decision rule is less than unanimity. a. True b. False ANSWER a
Traditionally, elementary and secondary education was an enterprise of state government. a. True b. False ANSWER b
