Difference between the political process and market process

Question

Assignment:

QUESTION 1. One important difference between the political process and the market process is that

• the political process results in collective actions that maximize economic surplus, while the market process may lead to efficiency losses.
• the political process results in collective actions in which not everyone is required to participate, while in the market process individuals are obliged to participate.
• the political process results in collective actions in which everyone is made better off, while the market process results in actions that favor some groups only.
• the political process results in collective actions in which everyone is obliged to participate, while in the market process individuals are free to participate or not.

QUESTION 2. What is regulatory capture?

• It is a situation in which a policymaker seeks to improve his election prospects by aligning himself with a powerful special interest group which will finance his political campaign.
• It is the exchange of political support between a regulatory agency and the regulated firm resulting in both parties capturing economic rents.
• It is a situation in which a firm being regulated successfully influences the regulatory agency's actions to benefit the interests of the firm, rather than the public interest.
• It is a situation in which a regulatory agency uses its authority to force actions that are not favored by the regulated firms but are in the public's interest.

QUESTION 3. If, as your taxable income decreases, you pay a smaller percentage of your taxable income in taxes, then the tax is

• unfair.
• regressive.
• proportional.
• progressive.

QUESTION 4. If you pay a constant percentage of your taxable income in taxes, the tax is

• random.
• progressive.
• regressive.
• proportional.

QUESTION 5. According to the study by Saez and Zucman, the average tax rate by income group (composed of all categories of US taxes) is roughly:

• regressive.
• random.
• progressive.
• proportional.

QUESTION 6. According to the study by Saez and Zucman, the average annual income of an adult in the bottom 50 percent of the US workforce (the working class) for 2018 is:

• $18,500
• $30,000
• $50,000
• $65,000

QUESTION 7. Exemptions and deductions are used

• to determine the type of tax structure.
• by taxpayers to reduce the amount of income subject to tax.
• to add to taxes that must be paid.
• to determine what items are subject to sales taxes.

QUESTION 8. According to the study by Saez and Zucman, the percentage of national income in the US that is subject to individual income tax in 2018 (given legal exemptions in the tax code) is:

• 90%
• 63%
• all income is subject to taxation in the US tax code.
• 82%

QUESTION 9. An average tax rate is calculated as

• taxes paid ÷ total taxable income.
• (total taxable income - taxes paid) ÷ taxable income.
• total taxable income ÷ taxes paid.
• total taxable income × taxes paid.

QUESTION 10. The "ability-to-pay" principle of taxation is the normative idea that

• progressive taxes are not more equitable than regressive taxes.
• an equitable tax system is one in which high income individuals should bear a greater burden of taxes than low income individuals.
• two individuals earning the same income should have equal ability to pay, all else constant.
• each individual should voluntarily contribute according to her ability to pay taxes.

QUESTION 11. Stacy Abrams was a founder of the "Black Lives Matter" movement according to the documentary Not Done: Women Re-making America.

• True
• False

QUESTION 12. The "Time's Up" movement is primarily about stopping sexual harassment at the workplace as shown in the documentary Not Done: Women Re-making America.

• True
• False

QUESTION 13. The idea that individuals should be taxed in proportion to the marginal benefits that they receive from public goods is called

• the ability-to-pay principle.
• the horizontal-equity principle.
• the benefits-received principle.
• the vertical-equity principle.

QUESTION 14. The sales tax

• is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.
• is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
• is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
• is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.

QUESTION 15. According to Lawrence Lessig the "first problem" is

• politicians in the US Congress are dependent on a small number of influential campaign funders
• the need to institute a nation-wide value added tax like other nations
• the size of the national debt
• climate change as an existential threat.

QUESTION 16. According to Marc Benioff, corporate managers should promote gender equity which includes all the following elements except

• Stopping sexual harassment
• Equal pay
• Corporate pay bonuses for higher performing women
• Equal advancement

QUESTION 17. Professor Robert Reich explains the cap on social security payroll taxes means this payroll tax is:

• progressive.
• proportional.
• random.
• regressive.

QUESTION 18. As discussed in the Quiz review video, the vision for a "new stakeholder capitalism" as expressed by Marc Benioff finds an expression in the move by the California legislature that recently passed which law?

• the law that requires that women have greater representation on the Board of Directors of all large corporations based in California.
• the law that prohibits discrimination against job applicants with prior convictions
• the law that makes gig workers self-employed contractors
• the law that prohibits bars staying open past midnight

QUESTION 19. When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs it wanted employers and workers to share the burden of the tax equally. Most economists who have studied the incidence of the tax have concluded

• the tax is not high enough to cover the future costs of Social Security and Medicare.
• the burden of the tax falls almost entirely on workers.
• the tax rate should be greater for high-income workers than for low-income workers.
• the tax on employers is too high because it reduces the employment of low-skilled workers.

QUESTION 20. The graph above depicts the imposition of an excise tax of $1.00 per pack in the market for cigarettes.

The total tax revenue collected by the government is:

• $2200
• $2,000
• $220
• $8000

QUESTION 21. The graph above depicts the imposition of an excise tax of $1.00 per pack in the market for cigarettes.

Of the total tax revenue collected by the government, the portion borne by the consumer is:

• $400
• $200
• $1,600
• $2000

QUESTION 22

The graph above depicts the imposition of an excise tax of $1.00 per pack in the market for cigarettes.

The excess burden of the tax measures the efficiency loss in transactions (deadweight loss) due to the tax. The excess burden of the $1 per pack tax above is:

• $100
• $2000
• $50
• $200