There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year.
Taxes in Katlandia are:
A. progressive.
B. regressive.
C. proportional.
D. based on each resident's willingness to pay.
Answer: B
You might also like to view...
In the above table, if the firm produces 2 units of output, it will
A) make an economic profit of $9. B) make an economic profit of $60. C) incur an economic loss of $9. D) incur an economic loss of $60.
Perfectly competitive firms are known for being "price makers."
a. True b. False Indicate whether the statement is true or false
If the interest rate is 5 percent, then receiving $1,000 eight years from now is worth more than receiving $700 today
a. True b. False Indicate whether the statement is true or false
With respect to the consumer price index, which of the following serves as an example of how the substitution bias arises? Between 2010 and 2011, the price of a pound of peanuts
a. rises from $0.80 to $1.00 while the price of a loaf of bread rises from $2.00 to $2.50. b. falls from $0.90 to $0.72 while the price of a loaf of bread falls from $2.00 to $1.60. c. remains constant, as does the price of a loaf of bread. d. None of the above serves as an example of how the substitution bias arises.