Tax shifting
A. occurs when taxed agents can alter their behavior and do something to avoid paying a tax.
B. occurs when taxes cause prices to increase, but wages to fall.
C. is the way in which a tax is structured.
D. is the ultimate distribution of a tax's burden.
Answer: A
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In an unregulated, competitive market, less than the efficient quantity of education is produced and consumed because
A) the decisions to produce and consume education are based on marginal private costs and marginal private benefits. B) the decisions to produce and consume education are based on marginal social costs and marginal social benefits. C) the decisions to produce and consume education are based on marginal private benefits and marginal social costs. D) marginal private costs are consistently greater than marginal private benefits.
All of the following are examples of negative externalities except one. Which is the exception?
a. Water pollution. b. Your roommate going on a diet. c. Second-hand smoke. d. Loud conversation in the workplace.
While tax cuts may increase productivity, the government is forced to redistribute the tax burden or cut its own spending
a. True b. False
Identify the "oversimplified multiplier formula."
a. Multiplier = 1 divided by (1 ? change in GDP) b. Multiplier = 1 divided by (1 ? marginal propensity to consume) c. Multiplier = 1 divided by (1 ? marginal propensity to save) d. Multiplier = 1 divided by (1 ? rate of inflation)