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Questions › JNU › JNU SSS 2016 › Q10
1 markPublic Economics › Taxation: incidence and efficiency › Progressive, proportional and regressive taxesHardabout 2 min

JNU SSS 2016 Question 10: Taxation: incidence and efficiency

Suppose in an economy the amount of income tax (T)(T)(T) which has to be paid by an individual with income (Y)(Y)(Y) is given by the following relations : T=0T = 0T=0, if Y<25Y < 25Y<25 T=−25+5Y12T = -25 + 5Y^{\frac{1}{2}}T=−25+5Y21​, if Y≥25Y \geq 25Y≥25

Over the income range 167 to 219, the income tax regime is

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Suppose in an economy the amount of income tax (T) which has to be paid by an individual with income (Y) is given by the following relations: T = 0, if Y < 25 T = -25 + 5Y^(1/2), if Y ≥ 25 Over the income range 167 to 219, the income tax regime is (A) progressive (B) regressive (C) proportional (D) None of the above

Also written as: Suppose in an economy the amount of income tax (T) which has to be paid by an individual with income (Y) is given by the following relations: T = 0, if Y < 25 T = -25 + 5Y^(1/2), if Y >= 25 Over the income range 167 to 219, the income tax regime is

Taxation: incidence and efficiency has come up 79 times in 7 exams since 2009.

What this question tests

This question is on Progressive, proportional and regressive taxes, part of Taxation: incidence and efficiency in Public Economics.

How the burden of a tax changes with income, measured by average and marginal tax rates.

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Question from the JNU SSS 2016 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.