Exam 2

Question 1

Lump-Sum Tax

Question 2

Property Tax

Question 3

Consumption Tax (Commodity Tax)

Question 4

Income Tax

Question 5

Capital Tax

Question 6

Tariff

Question 7

Distortionary Tax

Question 8

Redistributive Tax

Question 9

Social Planner

Answer 9

Omnipotent and benevolent organizer of the economic model we’ve created
- maximizes utility and profits and minimizes distortion from taxation while satisfying all constraints

Question 10

Deadweight Loss (Efficiency Loss)

Answer 10

Created by taxes.
DWL = (1/2) · Base · Height = (1/2) (qi^8 - qi^’)ti

= ti^2/(2*bi)

Question 11

Equity

Question 12

Efficiency

Question 13

Per Unit Tax

Answer 13

A dollar amount paid for each transaction that does not depend on the price.

Question 14

Ad Valorem Tax

Answer 14

A dollar amount paid for each transaction that is a percentage of the price.
- Can be easily compared across goods

Question 15

Elasticity of Demand

Question 16

Cross-Price Elasticity

Question 17

Marginal Deadweight Loss of Government Spending

Question 18

Social Welfare Function

Question 19

Utilitarian Social Welfare Function

Question 20

Rawalsian Social Welfare Function

Question 21

Bernoulli-Nash Social Welfare Function

Question 22

Inequality Aversion

Answer 22

(ϵ)

Question 23

Lorenz Curve

Question 24

Gini Coefficient

Question 25

Marginal Tax Rate

Answer 25

(T′(z))

Question 26

Tax Function

Answer 26

(T(z))

Question 27

Agent Monotonicity

Question 28

Social Planner's Problem

Question 29

Hazard Rate

Answer 29

(h(z))

Question 30

Inverse Hazard Rate

Question 31

Density Function

Answer 31

(g(z))

Question 32

Cumulative Distribution Function

Answer 32

(G(z))

Question 33

Labor Supply Elasticity

Answer 33

(εn)