An income tax to pay for national defense can approximate a _____ if there is a close relationship between income and _____
a. user charge; wealth
b. unit tax; wealth
c. user charge; consumption
d. sales tax; consumption
a
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The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is $5 a ride
Motorville taxicab drivers want to obtain government's permission to raise the fare to increase their revenues and ask you to be their economic adviser. After studying the market, you come up with the following demand schedule for taxicab rides: a) Calculate the price elasticity of demand for taxicab rides as the fare rises from $5 to $6. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare rise? b) What happens to the taxicab drivers' total revenue if the fare rises from $5 to $6? How can you use your answers in part a to answer this question? Should the drivers try to obtain permission to raise the fare? c) Calculate the price elasticity of demand for taxicab rides as the fare falls from $5 to $4. (Use the midpoint method in your calculations.) Is the demand price elastic or inelastic for this fare decrease? d) What happens to the taxicab drivers' total revenue if the fare falls from $5 to $4? How can you use your answers in part c to answer this question? Should the drivers try to obtain permission to lower the fare? e) What fare will maximize the taxicab drivers' total revenue? Explain.
If Colombia has a comparative advantage over Mexico in the production of coffee, then:
A. Colombia probably sells coffee to Mexico. B. Mexico is more productive at making coffee than Colombia. C. Colombia has the ability to produce more coffee than Mexico with the same resources. D. Mexico should trade coffee to Colombia.
The primary economic function of financial intermediaries is to help allocate scarce resources to desired uses.
Answer the following statement true (T) or false (F)
Two of the variables used to construct the KOF Swiss Economic Institute's economic globalization index are _______________ as a percentage of GDP, and tariff rates (the ______________ the tariff rate, the _____________ degree of economic globalization)
A) public debt; higher; lower B) trade; higher; lower C) trade; higher; higher D) budget deficits; lower; higher