An income tax for which the average tax rate decreases with income is called a
A) regressive income tax.
B) proportional income tax.
C) flat-rate income tax.
D) progressive income tax.
Ques. 2________ is the benefit that a consumer of a good or service receives.
A) Marginal private benefit
B) Marginal external benefit
C) Marginal social benefit
D) Both answers A and B are correct.
Ques. 3An inferior good is a good whose income elasticity of demand is less than 0.
Indicate whether the statement is true or false
Ques. 4Which of the following statements is CORRECT?
A) Because information is different from typical goods and services, it cannot be provided in a market.
B) The marginal benefit from more information does not decrease.
C) Too little information is provided if the market for information is a monopoly.
D) Acquiring more information can never be inefficient.
Ques. 5In their calculation, concentration ratios take barriers to entry into a market into consideration.
Indicate whether the statement is true or false
Ques. 6The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a proportional income tax, it will implement tax plan ________.
A) A
B) B
C) C
D) None of the above because none of the above are proportional taxes.
Ques. 7The substitution effect
A) is always larger than the price effect.
B) always decreases purchases of a good as the price of a good rises.
C) increases purchases of the good as the price rises if the good is a normal good.
D) is always smaller than the income effect.
Ques. 8If Tom's total utility from watching one more minute of television increases but the increase for each additional minute is smaller than the previous minute, he has diminishing marginal utility.
Indicate whether the statement is true or false
Ques. 9For inferior goods, the income elasticity of demand is negative.
Indicate whether the statement is true or false
Ques. 10A monopolistically competitive firm produces a good or service that has no close substitutes.
Indicate whether the statement is true or false
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