Suppose Jerry and Joseph are two tenants sharing an apartment having a private lawn. They have agreed to share the costs of cleaning and maintaining it. Jerry would be considered an opportunist if he plants some flowers in this lawn at his own expense without consulting Joseph

The federal government, in order to fund expanded health care, imposes a lump-sum tax on all business property. Profit-maximizing firms that stay in business will respond by

a. raising prices to pay the tax. b. cutting output to reduce costs. c. lowering prices to stimulate demand. d. doing nothing.

A regressive tax

a. taxes individuals with higher incomes at a higher rate than individuals with lower incomes. b. takes a similar percentage of income at all income levels. c. takes a higher percentage of the income of those with lower incomes than for those with higher incomes. d. taxes savings at a higher rate than consumption.