The appropriate tax rate to consider gauging how much the tax system distorts incentives and decision making is the ?

A. Proportional tax rate
B. Average tax rate
C. Marginal tax rate
D. Vertical tax rate

The graph that shows the relationship between the size of a tax and the tax revenue collected by the government is known as a ?

A. None of these answers
B. Reagan curve
C. Keynesian curve
D. Laffer curve

The reduction of tax ?

A. Will have no impact on tax revenue.
B. Will always reduce tax revenue regardless of the prior size of the tax
C. Could increase tax revenue if the tax had been extremely high
D. Causes a market to become less efficient

If the Pakistani government runs a budget surplus there is ?

A. An excess of government receipts over government spending.
B. An equality of government spending and receipts.
C. A surplus of government workers.
D. An excess of government spending over government receipts.

A tax for which high income taxpayers pay a smaller fraction of their income than do low income taxpayers is known as ?

A. A proportional tax
B. A regressive tax
C. An equitable tax
D. A progressive tax

Refer to Exhibit 4. If a tax is placed on the product in this market. deadweight loss is the area ?

A. B + c + e + f
B. E + f
C. B + c
D. A + b + c + d

Which of the following would likely cause the greatest deadweight loss ?

A. A tax on salt
B. A tax on cigarettes
C. A tax on petrol
D. A tax on cruise line tickets

Deadweight loss is greatest when ?

A. Supply is elastic, and demand is perfectly inelastic
B. Demand is elastic, and demand is perfectly inelastic
C. Both supply and demand are relatively inelastic
D. Both supply and demand are relatively elastic

Which of the following is true with regard to a tax on labor income? Taxes on labor income tend to encourage ?

A. The unscrupulous to enter the underground economy
B. The elderly to retire early.
C. All the things described in these answers.
D. Second earners to stay home.

Refer to Exhibit 4. If there is no tax placed on the produced in this market consumer surplus is the area ?

A. C + d + f
B. A
C. A + b + e
D. D + c + b