MICROECONOMICS(LL); CNCT 21 2018 >IP<
21st Edition
ISBN: 9781260389470
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 5, Problem 2RQ
To determine
The marginal benefit of the government program.
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(Last Word) The combined cost of Social Security and Medicare programs was what percent of U.S. GDP in 2008
(A) 7.6
(B) 12.4
(C) 17.2
(D) 2.9
If the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent.
O 15, 25 O 25, 15 O 25, 30 O 30, 25
9. True or false? If the statement is false, explain why: LO4
a. An internally held public debt is like a debt of the left hand owed to the right hand.
b. The Federal Reserve and federal government agencies hold more than half the public debt.
c. As a percentage of GDP, the federal debt held by the public was smaller in 2010 than it was in 1990.
d. As a percentage of GDP, the total U.S. public debt is the highest such debt among the world’s advanced industrial nations.
Chapter 5 Solutions
MICROECONOMICS(LL); CNCT 21 2018 >IP<
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- 8. Suppose the computer industry receives an initial extra income for $100. Think about the multiplier process in the first round. I). How much more income will the wire industry receive in the first round? O. $20 O. $25 O. $45 O. $55 ii). How much income will local workers receive? O. $20 O. $25 O. $45 O. $55arrow_forwardBeing a legislative in nature, the power to tax may not be delegated excepta. To local governments or political subdivisionsb. When allowed by constitutionc. When delegation related merely to administrative implementation that may callfor some degree of discretionary powers under a set of sufficient standardsexpressed by law or implied from the policy and purpose of the act.d. All of the above Which theory in taxation states that without taxes, a government would be paralyzed forlack of power to activate and operate it, resulting in its destruction?a. Power to destroy theoryb. Lifeblood theoryc. Sumptuary theoryd. Symbiotic doctrinearrow_forwardSuppose demand and supply are given by: Q^d=14-0.5P and Q^s=0.25P-1. Determine the equilibrium quantity and price in this market. Show the equilibrium graphically. Suppose a $12 excise tax is imposed on the good.Determine new supply and the new equilibrium quantity and price. How much does producers' revenue change? How much tax revenue does the government earn?arrow_forward
- c) Instead of introducing the 20% corporate tax in part (b), the government decided to add an ad valorem input tax of 100% to input 2. What is the profit-maximizing amount of each input to use? What is the profit-maximizing output? How much is Rodrigo’s new profit?arrow_forwardAccording to the "advance" estimate from the Bureau of Economic Analysis, by how much did the United States' real GDP increase in the third quarter of 2023? 4.9% 2.5% O 7.6% -4.3% Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardTable 27-1 Y = C + I + G C = 500 + 0.8(Y − T) I = 300 G = 700 T = 0.25Y Table 27-1 Y = C + I + G C = 500 + 0.8(Y−T) I = 300 G = 700 T = 0.25Y Refer to Table 27-1. What is the level of tax revenues in this model? a. 1,000 b. 937.5 c. 437.5 d. 950 e. 945.5arrow_forward
- 4. Suppose that there are two households in the economy, A and B, that they face the same wage rate w, and that the government initially uses a proportional income tax according to which each household must pay a fraction t of its labor income as income tax. Assume that given this tax scheme household A chooses to work full time while household B chooses to work part time. Now suppose that the government is interesting in studying the impact of changing the tax system to a progressive tax system where the household work- ing full time would pay a tax rate th >t while the household working part time would pay a rate ti < t. (a) Draw a graph of the impact of this change on the budget constraint that households face with the two different tax systems. (b) What would such a change in the tax system imply for the optimal choice of the two households?arrow_forwardCrusoe will live this period and the next period as the lone inhabitant of his island. His only income is a crop of 100 coconuts that he harvests at the begin- ning of each period. Coconuts not consumed in the current period spoil at the rate of 10 percent per period. (LO5) a. Draw Crusoe’s intertemporal budget constraint. What will be his consump- tion in each period if he regards future consumption as a perfect, one-for- one substitute for current consumption? b. What will he consume each period if he regards 0.8 unit of future consump- tion as being worth 1 unit of current consumption?arrow_forward1- Can you explain the benefit principle and ability to pay approach with regard to tax equity. Which approach do you think is appropriate regarding tax equity (fairness) ? And why? 2. Can you explain the effects of government borrowing regarding Ricardo’s Equivalence Theorem and give the main arguments against this theorem. Thank you very much.arrow_forward
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