The principle of vertical equity is satisfied when _____
a. individuals with a greater ability to pay have higher taxes than individuals with a lower ability to pay
b. individuals receiving higher benefits from a government program pay higher taxes than those receiving lower benefits
c. taxes increase as family size increases
d. taxes on higher income individuals are more efficient than the taxes on lower income individuals
a
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Refer to Goods X and Y. If the indifference curves are horizontal, then we can conclude that
Assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions. a. X does not affect the individual’s utility. b. Y does not affect the individual’s utility. c. both X and Y affect the individual’s utility. d. neither good affects the individual’s utility.
If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that
a. Y and Z are complements. b. Y and Z are substitutes. c. Y and Z are unrelated. d. the demand for Y is elastic, but the demand for Z is inelastic.
The equity of a tax system concerns whether the tax burden is distributed equally among the population
a. True b. False Indicate whether the statement is true or false
Assume that five oligopolists begin with a common price of p = $15. One of the firms raises its price to $18. What are the other four firms likely to do, based on the theory of the kinked demand curve?
A. Raise their prices also, but by less than $3 B. Raise their prices by $3 C. Keep their prices the same D. Lower their prices by less than $3