Progressive income taxes are designed to
A. make the distribution of income less equal.
B. leave unchanged the distribution of income.
C. let the market determine the distribution of income after taxes.
D. make the distribution of income more equal.
Answer: D
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If social returns to the production of a good are greater than private returns, then we can conclude that relative to the social optimum, the good will be
A) over produced and under priced. B) under produced and over priced. C) over produced and over priced. D) under produced and under priced. E) None of the above.
An advantage of a unit tax is that the relative price changes have no effect on the tax per unit
a. True b. False
If everyone had the same income, then the Lorenz curve would:
a. be the line of income equality. b. bow down below the line of income equality. c. be a parallel line lying below the line of income equality. d. bow up above the line of income equality. e. be a curve that intersects the line of income equality at its mid-point.
Naomi Burko, who is a dairy farmer in Tigerton, Wisconsin, became unemployed because fewer and fewer people, concerned about their health, consumed butter. Naomi can best be described as
a. frictionally unemployed b. structurally unemployed c. cyclically unemployed d. not part of the labor force e. a discouraged worker