The Earned Income Tax Credit (EITC) is a tax provision that allows poor working families to receive income tax refunds greater than the taxes they paid during the year. Therefore, the EITC works much like a
negative income tax
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Refer to Figure 7-5. If consumers paid the full price of medical services, the price they would pay is
A) $40. B) $55. C) $65. D) > $65.
Cartels can detect cheating by
A) reporting each other to government authorities. B) keeping two sets of accounting books, one for internal use and one for sharing with the cartel. C) dividing the market by region so that each cartel member is the only seller in a particular region. D) All of the above.
Taxes change behavior for all of the following reasons except they:
A. alter the incentives faced by market participants. B. drive a wedge between the price paid by buyers and the price received by sellers. C. result in a lower equilibrium quantity of the good or service being consumed. D. increase consumer and producer surplus experienced at market.
Which of the following is the common link among developing countries?
a. Low poverty b. Low unemployment c. Low trade deficits d. Minimum government interference e. Low per capita GDP