Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik
a. hold different normative views about the tax system.
b. disagree about the validity of a positive theory.
c. have a fundamental misunderstanding of the tax system.
d. More than one of the above is correct.
d
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Encouraging international trade will
A) slow economic growth as many workers lose their jobs to foreign workers. B) speed economic growth as workers specialize and trade with others. C) speed economic growth because international trade limits the harm done by property rights. D) slow economic growth when a country is forced to specialize and trade with other countries. E) speed economic growth as workers diversify their knowledge and limit trade.
Which of the following goods is more likely to be excludable?
A) a chocolate bar B) a concert at Times Square C) national defense D) ocean breeze
The above figure shows the demand and cost curves facing a monopoly. If the firm is a profit maximizer, its Lerner Index will equal
A) 1. B) 1/3. C) 1.5. D) 3.
If the cost of production of the firms in a perfectly competitive market differs the resulting long-run supply curve will be an upward rising step function
Indicate whether the statement is true or false