Exemptions and deductions included in the tax laws
A. Make the tax structure more progressive.
B. Reduce horizontal inequities.
C. Are designed to encourage specific economic activities.
D. Reduce vertical inequities.
Answer: C
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The slope of the budget line is the amount of one commodity that a consumer must give up in order to obtain an additional unit of the other commodity.
Answer the following statement true (T) or false (F)
Migration of educated individuals from developing- to developed countries is referred to as the
a. survival of the fittest b. demographic transition c. disguised unemployment d. brain drain e. none of the above
When market conditions in a competitive industry are such that firms cannot cover their total production costs, then
a. the firms will suffer long-run economic losses. b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. c. some firms will exit the market, causing prices to rise until the remaining firms can cover their total production costs. d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their total production costs.
Two firms, Acme and FirmCo, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Acme ($/day)$750$800$1,000$1,400$2,000Cost to FirmCo ($/day)$500$750$1,200$2,200$4,000 Suppose the firms are both currently using process A. If the government imposes a tax of $110 per ton of smoke emitted, then Acme will use process ________, and FirmCo will use process ________.
A. D; C B. C; A C. B; A D. C; C