A tax system in which tax rates fall as incomes rise is

A. Flat.
B. Regressive.
C. Proportional.
D. Progressive.


Answer: B

Economics

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When marginal revenue is zero:

A. total cost is minimized. B. total revenue is maximized. C. elasticity of demand is zero. D. profit is maximized.

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The fact that severe fluctuations in inflation and unemployment are socially undesirable helps make the case for

A. a “hands off” policy by the government. B. fixed prices and wages. C. active government stabilization policy. D. restrictions on imports from low wage countries.

Economics

Suppose that there are two types of cars, good and bad. The qualities of cars are not observable but are known to the sellers. Risk-neutral buyers and sellers have their own valuation of these two types of cars as follows:  Types of CarsBuyer's ValuationSeller's ValuationGood (50% probability)5,0004,500Bad (50% probability)3,0002,500Now suppose that sellers value a good car at $4,500 and a bad car at $2,500, and quality is not observed by the buyers. What is the highest price that risk-neutral buyers will offer for a used car if they recognize adverse selection?

A. $4,000 B. $3,000 C. $4,500 D. $2,500

Economics

What are the pros and cons of regulating a monopoly?

Economics