Public finance.

...

94.The proponents of the flat taxation of income support it by the argument of “Laffer-type behavioral responses." What they mean by that?

95. Flat tax rates on income are not in accordance with optimal taxation of income with fairness of taxation. Why?

96. Below you see taxation scale.

income

marginal tax

0-5000

0%

5001-20000

5%

20001-40000

10%

40001-60000

20%

over 60000

30%

Taxable income= 100000. What is a tax and what is the effective tax rate?

97. Below you see taxation scale.

income

marginal tax

0-5000

0%

5001-20000

5%

20001-40000

10%

40001-60000

20%

over 60000

30%

Taxable income= 55000. What is a tax and what is the effective tax rate?

98. In the majority of the world countries the income is taxed according to optimal taxation rule. Please explain that rule .

99. Optimal taxation of goods and services requires an adoption of Ramsey rule. Please explain how goods and services should be taxed to be in accordance with that rule? In your home country is the VAT is applied according to Ramsey rule? If yes why if not why?

100.What are the benefits of the broad tax base rule?

101. The Ramsay rule is described as the invers elasticity rule. Demand elasticity for a good A is 3; demand elasticity for a good B is 0,5. On the good B 21% VAT is imposed, how good A should be taxed according to Ramsey optimal taxation rule?

VAT rate on the A good should be:…%

102. The Ramsay rule is described as the invers elasticity rule. Demand elasticity for a good A is 4; demand elasticity for a good B is 2. On the good B 20% VAT is imposed, how good A should be taxed according to Ramsey optimal taxation rule?

VAT rate on the A good should be:…%

103.The Ramsay rule is described as the invers elasticity rule. There are following demand elasticity for a good A is 0,4; for B is 1 for C is 2,5 for D 3,5. VAT on good A is set as 20%; what should be VAT on B, C and D in order to be in accordance with the inverse elasticity rule?

104.The Ramsay rule is described as the invers elasticity rule. There are following demand elasticity for a good A is 0,5; for B is 1,2 for C is 2,8 for D 3,9. VAT on good A is set as 25%; what should be VAT on B, C and D in order to be in accordance with the inverse elasticity rule?

105.What would be the equity implications of the strict application of the Ramsay rule in taxation of goods and services?

106. In the process of income redistribution there is so called “leaky bucket” effect. Please explain shortly what is meant by that term and what are basic sources of leakage?

107.Please explain the difference of the taxation base in the case of payroll tax and PIT?

108. What we mean by the term “ vertical equity” in taxation of individual incomes?

109. What we mean by the term “ horizontal equity in taxation of individual incomes?

110. VAT is considered as so called regressive taxation. Please provide a numerical example illustrating regressiveness of the VAT when tax rate is 25%.

111. Flat PIT is considered as so called regressive taxation. Please provide a numerical example illustrating regressiveness of the flat PIT when tax rate is 15%.

112. Flat PIT is considered as so called regressive taxation. Please provide a solution to avoid regressiveness of the flat PIT when tax rate is 15%.

113. Flat PIT is considered as so called regressive taxation. Please provide a solution to ensure lower effective tax for a low income groups and higher effective tax rate for a high income groups when the flat PIT tax rate is 15% and constant to all income groups.

114. Please explain why direct taxation of income is in accordance with “ability-to-pay” rule and indirect taxation is not.

115. Is the flat taxation of income in accordance with “ability-to-pay” rule?

- In the theory of utility there is an assumption that with the increase of consumption of a given good marginal utility is decreasing. As a result of that assumption the indifference curves have always …/use two words only)

- When utility function in the case of two goods A and B has a form : U= square root of the product of A and B the utility is equal 10 for all the products equal 100. What product of the A and B we need to move to higher level of utility for example 11?

- The budget constrain is: income=5000 and in the case of two goods price of A=100 and price of B=200. What is the slope of the budget constrain line?

- At the given budget constrain increase of price of any good decreases demand for that good. How do we call that effect?

- At the given budget constrain increase of price of any good decreases the value of utility derived from consumption, in the other words, consumer moves to lower indifference curve. How do we call that effect?

- The price elasticity of demand is typically negative because quantity demanded…..

- Due to positive slope of the