1. If the supply of labor is perfectly inelastic, then the incidence of a payroll tax levied entirely on employers will be:
a. borne by employers as a reduction in profits. b. split between workers and employers. c. paid entirely by workers. d. shifted forward to consumers.
2. Comprehensive income:
a. includes realized capital gains, but not unrealized capital gains b. includes both realized and unrealized capital gains. c. excludes cash from the sale of assets. d. excludes increases in the value of assets.
3. What would be the effect of having no health insurance available?
a. The quantity of healthcare would be set at where the marginal benefit and marginal cost are equal. b. Excess demand for healthcare would be the result because the quantity supplied would be at a level where the marginal benefit exceeds the marginal cost. c. Excess supply for healthcare would be the result because the quantity supplied would be at a level where the marginal benefit would be below the marginal cost. d. the quantity of healthcare would be at an inefficient level.
4. If horizontal equity is achieved in taxation,
a. vertical equity will also be achieved. b. individuals of equal economic capacity will pay equal taxes. c. a flat-rate tax will be used. d. the tax system will not result in losses in efficiency in markets.