Choose the statement that is correct.
A. The ability-to-pay principle can justify high fuel taxes to pay for freeways and high taxes on alcoholic beverages and tobacco products to pay for public health care.
B. The ability-to-pay principle results in a tax system that is efficient and fair.
C. The benefits principle is a fair arrangement because it means that those who benefit most pay the most taxes.
D. The benefits principle results in a tax system that is efficient and fair.
C. The benefits principle is a fair arrangement because it means that those who benefit most pay the most taxes.
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If the market price is $4 and a perfectly competitive firm is producing 500 units and the marginal cost to produce the 500th unit is $4, which of the following is true?
A) The firm is maximizing profit. B) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is negative. C) The difference between marginal revenue and marginal cost (MR - MC) for the 500th unit is positive. D) The firm should increase production to maximize profit.
What must a government know for the infant industry argument to be a valid reason for imposing tariffs?
What will be an ideal response?
A person's tax liability refers to
a. the percentage of income that a person must pay in taxes. b. the amount of tax a person owes to the government. c. the amount of tax the government is required to refund to each person. d. deductions that can be legally subtracted from a person's income each year.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.