The government imposes a luxury tax on automobiles that cost more than $40,000. As a result, fewer individuals purchase cars that cost more than $40,000. This is an example of
A. tax shifting.
B. tax evasion.
C. tax equity.
D. tax incidence.
Answer: A
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A surplus of cardboard boxes means that
A) at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied. B) at the current price of a cardboard box, the quantity demanded is less than the quantity supplied. C) the current price of a cardboard box is less than the equilibrium price. D) at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium. E) More information is needed to determine if the price of cardboard boxes is higher than, lower than, or equal to the equilibrium price.
Suppose we observe that both the equilibrium price of film cameras and the equilibrium quantity of film cameras have fallen. Which of the following could be responsible for this?
A) Consumers' preferences changed in favor of digital cameras. B) technological advances in film camera production C) Workers who make cameras received a pay raise. D) The price of digital cameras increased.
Adrian's total utilities of two consumption bundles are 50 and 100. This implies that
A) Adrian prefers the first bundle. B) Adrian prefers the second bundle. C) Adrian likes the second bundle twice as much. D) Adrian likes the first bundle twice as much.
Inflation
a. hurts society by imposing additional opportunity costs b. is generally harmful, but has the benefit of reducing opportunity costs c. makes it easier for us to comparison shop d. benefits society by causing people to make use of resources that would have otherwise gone to waste e. benefits society because by making people better consumers, they start to buy only those consumer goods they really need