If the marginal tax rate is less than the average tax rate, the tax system is
A) progressive.
B) proportional.
C) regressive.
D) flat.
Answer: C
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Suppose Dean has season tickets for the University of North Carolina men's basketball games. He paid $2,000 for the season tickets. One February afternoon, Dean is very excited about going to the UNC vs. Duke game because of the traditional rivalry between the two teams. Unfortunately, his wife invited several friends over for an evening dinner party and tells Dean he needs to stay home and help her clean the house in preparation for the guests. Dean very much wants to go to the game, but knows he will have to face the wrath of his wife if he does. In his defense, Dean states "I already paid for the game! I have to go or it will be a waste of money." Explain why Dean's reasoning is incorrect.
What will be an ideal response?
Let's look at a simple example—a new building construction program. Government money is spent on goods such as concrete and steel as well as paying workers.
What will be an ideal response?
Last year, Tess bought 5 handbags when her income was $54,000 . This year, her income is $60,000 . and she purchased 7 handbags. Holding other factors constant, it follows that Tess's income elasticity of demand is about
a. 0.32, and Tess regards handbags as inferior goods. b. 0.32, and Tess regards handbags as normal goods. c. 3.17, and Tess regards handbags as inferior goods. d. 3.17, and Tess regards handbags as normal goods.
The long-run supply curve is upward sloping in an increasing cost industry.
Answer the following statement true (T) or false (F)