Public
Fifth Homework Assignment
Due Monday, April 4 at the beginning of class.
1. Terry makes $30,000 per year and pays $6,000 in income taxes. Raj makes $40,000 and pays $10,000 in income taxes. This is an example of which kind of tax: progressive, regressive, or flat (proportional)? Explain your answer in both words and numbers. (4 pts.)
2. Which of the following statements is correct AND explain your answer (both graphically and in words). (8 pts.)
a. the more elastic the supply, the greater the portion of an excise tax borne by the seller.
b. the more elastic the demand, the greater the portion of an excise tax borne by the seller.
c. the more inelastic the supply, the greater the portion of an excise tax borne by the buyer.
d. the more inelastic the demand, the greater the portion of an excise tax borne by the seller.
3. Which tax is the most difficult to shift to others? Explain your answer -- make sure you compare your answer to each of the options given to get full credit. And state any assumptions you make! (8 pts.)
a. personal (individual) income tax
b. corporate income tax
c. business property tax