In a progressive income tax system,
A) the marginal tax rate exceeds the average tax rate.
B) the average tax rate exceeds the marginal tax rate.
C) high income earners pay a lower percentage of their income in taxes than do low income earners.
D) the tax rate depends solely on how long an individual has been in the labor force.
A
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Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that
A) both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie. B) both bear the same opportunity cost of seeing the movie because they are doing the same thing. C) it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free. D) the opportunity cost of seeing the movie is zero because the tickets were free.
The income effect of an increase in the price of peaches is
A) the change in the quantity of other fruit demanded that results from the impact of the price change on purchasing power, holding all other factors constant. B) the change in the quantity of peaches demanded that results from the effect of the change in price on consumer purchasing power, holding all other factors constant. C) the change in the demand for peaches as a result of the change in the price of peaches, holding all other factors constant. D) the change in the quantity of peaches demanded that results from the price increase, making peaches more expensive than other fruit, holding constant the effect of the price change on consumer purchasing power.
Based on the Saving-Investment Diagram, if the world real interest rate is indicated by C, then ________
A) the difference between values H and D measures the net capital outflow B) the difference between values H and D measures the trade deficit C) the domestic real interest rate is indicated by B D) the difference between values H and F measures the trade deficit E) none of the above
Refer to the budget line shown in the diagram. Given the same money income, reductions in the prices of both products C and D will:
A. shift the budget line outward on the horizontal axis but leave it anchored at "10" on the
vertical axis.
B. shift the budget line to the left.
C. shift the budget line to the right.
D. have no effect on the budget line.