The ________is the percentage of an additional dollar of income that is paid in tax, and the _______ is the percentage of income that is paid in tax.

average tax rate; marginal tax rate
marginal tax rate; average tax rate
progressive tax; proportional tax
proportional tax; progressive tax

In the interest of the median voter, income taxes are _____________________.

average
regressive
progressive
proportional

Because of the free-rider problem, ____________________________.

there is an efficient allocation of resources
there is an increase in deadweight loss
too little of a good would be made by private provision
too much of a good would be made by private provision

An increase in property taxes in a neighborhood ________ supply and _______demand for property.

decreases; increases
decreases; decreases
decreases; has no effect on
increases; has no effect on

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses, ______________________.

total benefit is maximized
marginal benefit and marginal cost are increasing at a constant rate
marginal benefit minus marginal cost is a maximum
total benefit minus total cost is a maximum

Two rival political parties will most likely ____________________.

propose higher tax rates
propose similar legislation
propose legislation that appeals to the wealthy
capture approximately 50 percent of the votes each

An increase in income taxes _______ employment, _______ the after-tax wage rate, and _______ deadweight loss.

increases; increases; decreases
decreases; increases; increases
decreases; decreases; increases
increases; decreases; decreases

Bike paths and conservation areas are examples of ___________________.

marginal benefit exceeding marginal cost
deadweight loss
total benefit exceeding total cost
local public goods

When an excise tax is added to a commodity, the price usually ___________ and the equilibrium quantity _________.

decreases; increases
increases; decreases
increases; increases
decreases; decreases

By taxing commodities that have _______, the deadweight loss created by the tax is _______.

few complements; minimized
few substitutes; minimized
many complements; maximized
few substitutes; maximized

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