Use the idea of interpersonal comparisons of utility to argue for a progressive income tax system where people in higher income brackets are charged higher tax rates on their extra income.
What will be an ideal response?
Since the marginal utility of money diminishes for each individual, it seems reasonable to suppose that the utility a rich person derives from his/her marginal dollar is less than the utility a poor person derives from his/her marginal dollar. If the rich person doesn't get as much utility from his/her marginal dollar, then it won't hurt them as much to tax it away as it would hurt a poor person.
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Marginal cost is
a. the increase in total cost per additional unit of output. b. the increase in total cost per additional unit of input. c. the decrease in total cost from producing one less unit. d. both the increase in total cost per additional unit of output and the decrease in total cost from producing one less unit.
The data on hyperinflation show a clear link between the quantity of money and
a. the price level. b. growth rate of GDP. c. unemployment rate. d. velocity.
"Privatization of government owned industries is likely to increase unemployment in the short run" is a ________ statement about ________ policy.
A. positive; structural B. normative; structural C. positive; fiscal D. normative; monetary
Which statement is true?
A. The Microsoft operating system, Windows, runs on more than 90 percent of the 100 million PCs sold in the world each year. B. Microsoft's growing market power has enabled the company to crush competitors, thus eliminating competition and innovation. C. In 1995 Microsoft signed a consent decree with the government that prohibits the company from tying the purchase of one product to another but that allow it to develop "integrated" products. D. All of the statements are true.