Which of the following best describes disposable income?
a. Income after expenses and taxes
b. Income after taxes
c. Income after expenses
d. Income after taxes and payroll deductions
b. Income after taxes
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Taxation of agricultural land at a lower rate than commercial property might be justified _____
a. on utilitarian grounds b. on the benefit principle c. on the ability-to-pay principle d. on efficiency grounds
When a person drives an automobile, that individual is creating
A) internal costs only. B) private costs only because the individual pays for the insurance, gas etc. C) external costs only. D) social costs.
An insurance policy is a contract that:
a. benefits the parties if they have the same degrees of risk aversion. b. benefits the parties if both of them are risk neutral. c. benefits the parties if they have different degrees of risk aversion. d. benefits the parties if either of them is risk neutral.
If most people found the lifestyle of an assembly-line worker less desirable relative to that of persons in other professions, one would expect the return on the human capital investment of
a. assembly-line workers to be higher than that of persons in other professions. b. assembly-line workers to be lower than that of persons in other professions. c. assembly-line workers and that of persons in other professions to be nonetheless equal. d. both assembly-line workers and persons in other professions to be unaffected by the subjective preferences of investors.