Question

lesson 1: how taxes influence behavior
part 1
match the clues to the correct terms found in the answer - key. write the letter of each term in the space provided.
answer - key:
a. user tax
b. excise tax
c. sin tax
d. gasoline excise tax
e. luxury tax

1. a tax that is paid to the government by consumers when they purchase particular goods.

b

1. the point of this is to discourage the purchase of goods that do not promote consumers health.

c

1. this is placed on goods that are expensive and considered non - essential.

e

1. the purpose of this is to make consumers pay the price of manufacturing and distribution of certain products.

a

1. this has generated millions for road repair for more than sixty years.

d
part 2
in the space provided, identify the tax that could cause the behaviors described below.

1. you take the bus to work. ____________
2. you stop smoking. sin tax ____________
3. you drink only nonalcoholic beverages. sin tax ____________
4. you put off buying a new sports car until next year. ____________
5. you join a car pool. ____________

Explanation:

1. Taking the bus to work could be due to high gasoline - related taxes (Gasoline Excise Tax), which makes driving more expensive.
2. Stopping smoking is often influenced by sin taxes on tobacco products.
3. Drinking only non - alcoholic beverages can be due to sin taxes on alcoholic beverages.
4. Putting off buying a new sports car (an expensive and non - essential good) can be due to luxury tax.
5. Joining a carpool can be due to high gasoline - related taxes (Gasoline Excise Tax) making individual driving costly.

Answer:

1. Gasoline Excise Tax
2. Sin Tax
3. Sin Tax
4. Luxury Tax
5. Gasoline Excise Tax