DP Economics Questionbank

Fernando earns $35 000 in 2015. Calculate his average rate of tax.

Outline one potential advantage and one potential disadvantage of a progressive tax system.

Maki, who earns $70 000 in 2015, pays an average rate of tax of 27.14 %. Using the figures provided in Table 1, outline why her average tax rate is higher than that of Fernando.

Country Z implements a 10 % sales tax in 2016. Explain why an indirect tax is unlikely to be used as a mechanism to promote equity.

Fernando receives a pay rise in 2016. His total income rises to $43 000. Calculate the percentage of his additional income which must be paid as tax.

Evaluate the view that the best way to reduce income inequality in a country is by using progressive taxation.

Calculate the total welfare loss resulting from the imposition of the tariff on chia seeds.

Calculate the average tax rate for an individual who earns $64 000 per year.

Fred is a low-wage worker in Fairland. As a result of the minimum wage his income will increase from $15 000 per year to $19 000 per year.

Calculate how much additional income tax Fred will need to pay.