Assume that the government proposes a negative income tax that calculates the taxes owed as follows: Taxes Owed = (1/3 Income) - 10,000 . If a family doesn't earn any income, how does the negative income tax affect it?
a. It will receive an income subsidy of $1,000.
b. It will receive an income subsidy of $3,000.
c. It will receive an income subsidy of $10,000.
d. It will not be affected at all, since the negative income tax requires a family to earn income.
c
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Short-run equilibrium output is the level of output at which real GDP
A. equals real GDP per capita. B. equals potential output. C. maximizes firm profits. D. equals aggregate expenditure.
What do economists mean when they state that a good is scarce?
a. There is a shortage or insufficient supply of the good at the existing price. b. It is impossible to expand the availability of the good beyond the current amount. c. People will want to buy more of the good regardless of the price of the good. d. The amount of the good that people would like exceeds the supply freely available from nature.
Assume the demand for coffee increases and the supply of coffee decreases. Which of the following outcomes is certain to occur?
A. The equilibrium price of coffee will fall. B. The equilibrium price of coffee will rise. C. The equilibrium quantity of coffee will fall. D. The equilibrium quantity of coffee will rise.
To promote increased use of port facilities in a major coastal? city, a state government has decided to construct a? state-of-the-art lighthouse at a projected cost of? $10 million. The state proposes to pay half this cost and asks the city to raise the additional funds. Rather than raise its? $5 million in funds via an increase in city taxes and? fees, however, the? city's government asks major businesses in and near the port area to contribute voluntarily to the project. The city is likely to face problems in raising the funds because
A.the combination of public and private monies will create doubt as to the? lighthouse's legal owner.
B.individual businesses may presume that others will pay for the lighthouse so that they can escape paying for their portion without causing a reduction in the? structure's benefit..
C.major businesses in and near the port area are probably too numerous for the city to contact.
D.the businesses will demand tax breaks as compensation for their contributions.