Briefly discuss the source of federal government revenues. Give special attention to the evolution of revenue sources since the 1960s. What will be an ideal response? ANSWER Just as in 1960, the bulk of federal revenues come from individual income taxes. In 1960, 44 percent came from individual income taxes and in 2000 49.6 […]
The utility maximizing consumption bundle for an individual can be found by locating _____. a. the individual’s bliss point b. any point on an indifference curve touching the budget constraint c. the highest point on an individual’s indifference curve d. the point tangent to an individual’s budget constraint ANSWER d
When isolating the substitution effect of a change in an individual’s budget constraint, _____ is held constant. a. utility b. budget c. income d. consumption ANSWER c
If an individual’s budget constraint shifts, the individual’s changes in consumption can be broken down into _____ and _____ effects. a. budget; consumption b. income; substitution c. utility; indifference d. wealth; savings ANSWER b
For goods on which a relatively small portion of income is expended, _____. a. income effects will be small relative to substitution effects b. income effects will be large relative to substitution effects c. income effects will be about the same as substitution effects d. there will be no income effects. ANSWER a
As a percentage of total federal revenues the corporate income tax has _____. a. increased since 1960 b. declined since 1960 c. fallen during the 1980s, but risen since 1992 d. remained fairly constant since 1960 ANSWER b
As a percentage of total federal revenues, the individual income tax has _____. a. increased substantially since 1960 b. declined substantially since 1960 c. increased slightly since 1960 d. declined slightly since 1960 ANSWER c
Social insurance revenues _____ come from _____. a. primarily; Social Security payroll taxes b. primarily, Medicare taxes c. primarily; Social Security payroll taxes and Medicare taxes d. do not; Social Security payroll taxes ANSWER a
As a percentage of total federal revenue, excise taxes have _____. a. risen slightly since 1960 b. remained constant since 1960 c. risen considerably since 1960 d. fallen since 1960 ANSWER d
The bulk of federal budget receipts come from ______. a. individual income taxes b. social insurance revenues c. corporation income taxes d. excise taxes ANSWER a
