Public Finance, Econ 132, Final Exam guide,
1. In a graph of supply and demand and the size of the tax, calculate the consumer and producer surplus before and after the tax, and the change in the surplus.
2. In a graph of supply and demand and a tax, determine the after-tax price paid by the buyer and the after-tax price received by the seller.
3. If there is a sales tax, and the government wastes the funds, would the welfare loss to society equal, be greater than, or less than the deadweight loss?
4. If the supply of a good is relatively elastic, a tax on the good causes what response from buyers and sellers?
5. Without government intervention such as taxes on wages and profits and goods, does the market equilibrium for oranges maximize the social surplus, or is there something government can do to increase the surplus?
6. Given a graph of demand and the private costs based on the cost of inputs and the social cost including negative externalities not paid for by users, find the optimum price and quantity, assuming that the cost of eliminating the external effect is greater than the damage it causes.
7. The economic effect of taxing significant negative externalities on deadweight loss, price, and quantity.
8. The “incidence” of a tax means what?
9. The meaning of the deadweight loss or excess burden of taxation.
10. What do you know about marginal-cost pricing?
11. The Coase theorem.
12. Whether cost-benefit calculation is possible with subjective benefits.
13. Is government borrowing good or bad for the economy, or it depends on what?
14. What is a Pigovian tax, and what kinds of externalities does it best apply to, and what is the effect?
15. Whether only a government can pay for a large dam.
16. What are territorial collective goods, and what is their effect?
17. Which of the following is NOT considered a collective good?
18. Do subsidies for goods (in which tax revenues are used to reduce the price below the cost of production) have a deadweight loss?
19. The effect of taxes on the deadweight loss is mostly from marginal, average, total tax rates or a combination of these?
20. Are the people who live near a public park, that has unrestricted access and provides positive utility, free riders if they do not pay taxes to pay for the park?
21. Who pays a payroll tax?
22. Calculate the tax paid from a table of income tax brackets and rates.
23. When the supply curve is upward sloping and the demand curve is downward sloping, the sales tax raises the price of the good by how much?
24. History of the US income tax.
25. The taxation of corporate profit and dividends.
26. The possibility of evasion of taxation.
27. If a firm is a price taker in a global economy, and makes zero economic profit, a sales tax has what effect on the firm?
28. Unanimity in collective decision making: possible or not?
29. When taxes are justified on the basis that taxpayers receive specific government services, the tax is based on which principle of taxation?
30. The difference between a user fee and a tax is ...