Assume you pay a tax of $4,000 on a taxable income of $24,000. If your taxable income were $30,000, your tax payment would be $5,000. This suggests that the tax is:
A. progressive.
B. proportional.
C. regressive.
D. discriminatory.
B. Proportional
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The economist assumes that people act in accordance with the equimarginal principle, because the economist assumes that people are
a. altruistic. b. selfish. c. rational. d. price takers.
Trevor's Tire Company produced and sold 500 tires. The average cost of production per tire was $50 . Each tire sold for a price of $65 . Trevor's Tire Company's total profits are
a. $7,500. b. $25,000. c. $32,500. d. $67,500.
Exhibit 2-1 Production possibilities curve data ConsumptionGoods CapitalGoods 10 0 9 1 7 2 4 3 0 4 In Exhibit 2-1, why is the opportunity cost of producing the fourth unit of capital 4 units of consumption goods but the opportunity cost of producing 4 units of capital is 10 units of consumption goods?
A. It isn't. The opportunity cost of the fourth unit and the opportunity cost of four units is the same. B. Because consumption goods are more valuable than capital goods. C. Because the opportunity cost of capital goods is constant while the opportunity cost of consumption goods is decreasing as this economy moves from more consumption goods to more capital goods. D. Because the opportunity cost of the fourth unit of capital is the consumption goods that must be given up for this economy to move from three units of capital to four units of capital, but the opportunity cots of four units of capital is the amount of consumption goods that must be given up to go from zero units of capital to four units of capital.
A perfectly competitive firm faces a market clearing price of $150 per unit. Average total costs are at the minimum value of $200 per unit at an output rate of 100 units. Average variable costs are at the minimum value of $100 per unit at an output rate
of 50 units. Marginal cost equals $150 per unit at an output rate of 75 units. It can be concluded that the short-run profit-maximizing output rate is A) 75 units, at which the firm earns zero economic profits per unit sold. B) 75 units, at which the firm earns negative economic profits per unit sold. C) 75 units, at which the firm earns positive economic profits per unit sold. D) 50 units, because price is less than average variable costs.