A progressive tax means the percentage of income paid as taxes:
a. increases as income increases.
b. decreases as income increases.
c. remains the same as income increases.
d. none of these.
a
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Assume that a 3% increase in income across the economy produces a 1% decrease in the quantity of fast food demanded. The income elasticity of demand for fast food is ________, and therefore fast food is ________
A. positive; an inferior good. B. negative; a normal good. C. positive; a normal good. D. negative; an inferior good.
Refer to the information provided in Figure 33.1 below to answer the question(s) that follow.
Figure 33.1Refer to Figure 33.1. Which of the following statements is true?
A. Trade will benefit both countries because the United States has a comparative advantage in the production of soybeans and Canada has a comparative advantage in the production of alfalfa. B. Trade will benefit neither country because the United States has an absolute advantage in the production of both soybeans and alfalfa, but Canada has a comparative advantage in the production of both soybeans and alfalfa. C. Trade will benefit both countries because the United States has a comparative advantage in the production of alfalfa and Canada has a comparative advantage in the production of soybeans. D. Only Canada can benefit from trade because the United States has an absolute advantage in the production of both soybeans and alfalfa.