If taxes are a lump sum amount, then the AE function is
A. vertical.
B. downward sloping.
C. flatter than if taxes are a function of income.
D. steeper than if taxes are a function of income.
Answer: D
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A monopoly that can perfectly price discriminate creates no deadweight loss
Indicate whether the statement is true or false
Corporations receive funds when their stock is sold in the primary market. Why do corporations pay attention to what is happening to their stock in the secondary market?
What will be an ideal response?
If the quantity supplied of euro were greater than the quantity demanded, then the price of the
a. euro would rise. b. euro would fall. c. dollar would fall. d. euro would be in equilibrium.
When the buyer knows less than the seller about the characteristics of the good being sold, there is
a. a principal-agent problem. b. a moral hazard problem. c. an adverse selection problem. d. a signaling problem.