Which of the following is a difference between an income tax and an excise tax on gasoline?
a. An income tax exemplifies the ability to pay principle, while an excise tax on gasoline exemplifies the benefit principle.
b. An income tax is based on a marginal tax rate, while an excise tax on gasoline is based on an average tax rate.
c. An income tax is proportional, while an excise tax on
gasoline is progressive.
d. An income tax increases consumer surplus, while an excise tax on gasoline increases producer surplus.
a
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If the shutdown rule, p < AVC, is the same in the short run and the long run, explain why the shutdown prices may be different
What will be an ideal response?
The adult population of a country is 200 million. Of this population, 120 million are employed and 20 million are unemployed. The labor-force participation rate in this country is _____
a. 50% b. 30% c. 70% d. 35%
Assume that there is no accelerator affect. The MPC = 3/4 . The government increases both expenditures and taxes by $600 . The effect of taxes on aggregate demand is 3/4 the size of that created by government expenditures alone. The crowding out effect is 1/5 as strong as the combined effect of government expenditures and taxes on aggregate demand. How much does aggregate demand shift by?
a. $1480 b. $480 c. $160 d. None of the above is correct.
The Indianapolis Motor Speedway hosts the Indianapolis 500 and the Brickyard 400, in addition to other races. During their respective peaks, both events were sellouts. The 2009 through 2011 versions of the Brickyard 400 saw 100,000 or more empty seats. It would have been in that owner's best interest to
A. reduce ticket prices so that sellouts would resume. B. set the ticket price to where MC=MR, which may mean that there would not be a sellout. C. spend money to reduce seating. D. spend as much money on advertising as necessary to ensure a sellout.