"Those most able should pay the highest taxes" reflects the
a. ability-to-pay principle.
b. concept of horizontal equity.
c. idea of fiscal federalism.
d. benefits principle.
a
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The smaller the amount saved out of a change in disposable income, the
A) more horizontal the consumption function. B) larger the MPC. C) more net taxes affect consumption. D) smaller is autonomous consumption. E) smaller the MPC.
Andrew and Sarah are two traders in a pure exchange economy with two goods, Bikes and TVs. Suppose Andrew has preferences given by: U(B,T) = BT where B is the number of bikes and T is the number of TVs
Sarah only derives utility from TV, so her utility function can be given by: V(B,T) = T Describe the contract curve.
If two different fuel sources (e.g., coal and natural gas) are perfect substitutes in the long-run production of energy. How will a profit maximizing firm choose between these two inputs?
A) The firm will only use the input with lower cost B) The firm will use equal amounts of the two inputs, even if one of the inputs has a lower cost C) The firm will only use the input with higher cost D) The firm cannot achieve a profit maximizing level of output under these circumstances
Which of the following conditions distinguishes perfect competition from monopolistic competition?
a. the number of sellers b. freedom of entry and exit c. homogeneity of the product d. none of the above