Explain what kind of income tax structure wealthy people would most likely prefer. Do poor people share their preferences? Explain
Wealthy people would prefer a regressive income tax structure, because a smaller percentage of their
income is taxed under this scheme. Poor people would prefer a progressive structure, because they would
pay a smaller percentage of their income to taxes. Both wealthy and poor people would choose a
proportional tax as their second choice.
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Cartels:
A. can effectively sustain large profits in the long run. B. are usually illegal. C. can act as if they are a single monopoly. D. All of these statements are true.
Ceteris paribus, if an 6% increase in quantity supplied is caused by an 8% increase in price, then: a. supply is elastic
b. supply is unit elastic. c. supply is inelastic. d. the supply curve is perfectly vertical.
If a country tries to maintain a managed floating exchange rate system, it must be
A. a communist nation to accomplish it. B. willing to print and sell its own currency to strengthen it, if needed. C. willing to print and sell its own currency to weaken it, if needed. D. willing to sell gold and hard currency to weaken its currency, if needed.
Suppose that there are only two countries in the world, Heartland and Soulland. The two countries produce only two goods, corn and drill presses. At its current level of production, Heartland must give up production of 1/4 drill press to produce an additional 100 bushels of corn. Soulland must give up 1 drill press to produce an additional 100 bushels of corn. No trade now occurs between the two economies, and both economies are operating on their respective production possibilities frontiers. 89. (Exhibit: Heartland and Soulland) The country with a comparative advantage in the production of corn is:
A) Heartland. B) Soulland. C) neither; they both use the same technology. D) neither; they both use the same amount of resources.