The most cost-efficient tax breaks have inframarginal impacts. A. Smal; large B.

Question

The most cost-efficient tax breaks have inframarginal impacts. A. Smal; large B. large; small C. small; small D. large large 6. marginal impacts and 7. To satisfy both across-family horizontal equity and across-marriage horizontal equity, a tax system must be A. Progressive B. Proportional C. Regressive D. It is impossible for a tax system to satisfy both across-family horizontal equity and across-marriage horizontal equity simultaneously. 8. All things equal, producers bear more of a tax when supply is All things equal, consumers bear more of a tax when demand is A. elastic; elastic B. elastic; inelastic C. inelastic; elastic D. inelastic; inelastic

Explanation / Answer

1) Solution: large, small

Explanation: The most cost-efficicent tax breaks have large marginal impacts and small inframarginal impacts in comparison to those who change their behavior.

2) Solution: Proportional

Explanation: To satisfy both across-family horizontal equity and across-marriage horizontal equity, a tax system must be proportional and not progressive

3) Solution: inelastic, inelastic

Explanation: When supply is inelastic, producers bear most of tax, a tax levied on producers will be fully shifted to consumers when demand is perfectly inelastic.

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