A government tax on luxury goods may have unintended negative effects because ______.
a. subsidies are more effective incentives than taxes
b. use taxes are less profitable than income taxes
c. the tax might reduce consumption of those goods
d. the tax would redistribute income more unevenly
c. the tax might reduce consumption of those goods
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Refer to Figure 4-1. Kendra's marginal benefit from consuming the second ice cream cone is
A) $6.50 B) $6.00 C) $3.00 D) $2.25
Auto dealers slash prices at the end of the model year in response to deficient demand/excess inventory but restaurants facing the same problem slash production because
a. auto customers are less price sensitive than restaurant customers b. price elasticity of demand (in absolute values) is higher for auto than restaurant customers c. price elasticity of supply is lower in auto than in restaurants d. restaurant food spoils quickly and is much more perishable e. price elasticity of supply in autos is smaller than the absolute value of price elasticity of demand but the reverse is true for restaurants
Mark and Charles are roommates at college. Each has written a 25-page term paper for the same English class. They are equally poor typists. Charles types his own paper and gets paid by Mark to type his, too. On the basis of the information given, which one of the following must be true?
a. Mark is wealthier than Charles. b. Mark needs more time to study than Charles. c. Charles hates typing. d. Mark and Charles have different utilities for typing but place the same value on time. e. Mark's opportunity cost of typing is higher than Charles's.
Surplus
What will be an ideal response?