CAIE A-Level Economics 5.2.4 Taxation

CAIE A-Level Economics 5.2.4 Taxation
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise classifying direct and indirect taxes, identifying progressive, proportional or regressive incidence and calculating average and marginal rates from income data.

How this is tested

  • classify a tax by who pays it and whether its average rate rises, stays constant or falls
  • calculate average tax as total tax over income and marginal tax on the next income slice
  • evaluate tax changes through revenue, incentives, redistribution, inflation and indirect-tax regressivity

Question 24

[Maximum number: 1]

A worker earns $ 10000 and pays $ 1000 in income tax.
Another worker earns $ 30000 and pays $ 4500 in income tax.
A third worker earns $ 150000 and pays $ 50000 in income tax.
Which type of tax is this?

A

indirect

B

progressive

C

proportional

D

regressive