The average cost of the distortion created by taxes
A. is higher when the tax rate is constant than when it fluctuates.
B. is lower when the tax rate is constant than when it fluctuates.
C. equals the square root of the tax rate.
D. increases proportionately with the tax rate.
Answer: B
You might also like to view...
The pressure on corporate executives to maintain the market price of their company's stock gives them an incentive to
A) engage in insider trading. B) ignore the political consequences of what they do. C) produce goods subject to rapid obsolescence. D) pursue short-run profits at the expense of the company's long-run welfare. E) take account in their decisions of the probable long-run effects.
If the price of refillable butane lighters was to decrease, then
A) the quantity of butane demanded would increase. B) the demand for butane would decrease. C) the demand for butane would increase. D) the quantity of butane demanded would decrease.
The barrier to entry that allowed Alcoa to make persistent economic profits was ownership of an essential input
Indicate whether the statement is true or false
The sustainable flow of purchasing power available to an individual is equal to _____
a. the Fisher definition of income. b. the Haig-Simons definition of income c. consumption d. investment