Horizontal equity is a difficult concept to implement because
A. it is difficult to determine how unequally unequals should be treated.
B. it is difficult to measure ability to pay.
C. it is difficult to determine which people are equally situated.
D. people object to the use of absolute tax liability instead of percentage of income.
Answer: C
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Individuals who are more risk averse
a. buy less insurance b. buy more insurance c. are not more or less inclined to buy insurance d. are philosophically opposed to insurance
You expect to rent out a vacation home on Sanibel Island for $800 a month as an investment. Upkeep is estimated at $3,000 a year. If the current market interest rate is 5 percent, you are willing to pay __________ for the house
a. $132,000 b. $100,000 c. $160,000 d. $192,000 e. $800,000
At its minimum point, the average-total-cost curve is intersected by the:
a. average fixed cost curve. b. average variable cost curve. c. total fixed cost curve. d. total variable cost curve. e. marginal cost curve.
Which of these events would cause the consumer price index to overstate the increase in the cost of living?
a. Car makers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price. b. Energy prices decrease, and consumers respond by buying more gas and electricity. c. A new good is introduced that renders cellular telephones inferior and obsolete. d. All of the above are correct.