The idea of horizontal equity in taxation implies that
A. equally situated individuals should be taxed equally.
B. unequally situated individuals should be taxed unequally.
C. benefits should be given first to those individuals who need them most.
D. the greatest tax burden should be borne by the wealthiest individuals.
Answer: A
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The strategy underlying price discrimination is to
a. charge higher prices to customers who have better access to substitutes. b. charge everyone the same price but limit the quantity they are allowed to buy. c. increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand. d. reduce per-unit cost to the firm by charging higher prices to those with the most inelastic demand and lower prices to those with the most elastic demand.
Average fixed cost for an information product would
A. remain constant as quantity increases. B. decrease constantly as quantity increases. C. increase constantly as quantity increases. D. first decrease and then increase as quantity increases.