Suppose one goal of the tax system was to achieve vertical equity. While people may disagree about what is "equitable," based on the marginal tax rates given for the two years, which of the following statements is true?
a. Vertical equity is possible in both years.
b. Vertical equity is possible in 2009 but not in 2010.
c. Vertical equity is not possible in 2009 but is possible in 2010.
d. Vertical equity is not possible in either year.
Ans: b. Vertical equity is possible in 2009 but not in 2010.
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Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
With a per-unit tariff of Pt?Pc, the total amount of tariff revenue collected on this product will be
A. Pa?Pt times y?w. B. Pt?Pc times y?w. C. Pt?Pc times z. D. Pa?Pc times x.
The price of one bedroom apartments in Cheyenne increased from $55,000 to $65,000 and the quantity of apartment for sale increased from 25 to 30. Using the midpoint method, the price elasticity of supply for apartments in Cheyenne is equal to
A) 0.916. B) 0.75. C) 1.09. D) 2.18. E) 0.08.
Subtracting the inflation rate from the nominal rate of interest tells you the:
A. real interest rate. B. price level of the economy. C. nominal rate of return. D. real rate of inflation.
During the 2020 Summer Olympics in the city of Tokyo, some Tokyo residents rented rooms to visitors. This behavior
A. raised the demand for hotel rooms in Tokyo and should have been prevented by the city of Tokyo. B. helped reduce the shortage of hotel rooms caused by the high demand during the Olympics. C. reduced the demand for tickets to the Olympics since many local residents left Tokyo while they rented out space in their homes. D. helped raise the prices that visitors paid for hotel rooms in Tokyo.