In using taxes as a tool for the redistribution of income and wealth in the U.S. economy, the government
a. taxes households with higher incomes at higher rates.
b. uses tax revenues to provide services used to a greater extent by households with lower incomes.
c. uses tax revenues to make transfer payments to households with lower incomes.
d. Does all of these.
d. Does all of these.
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What will be an ideal response?
A perfectly competitive firm producing 100 units of output per period finds that: Average total cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the product is $15. This firm should
a. produce more output b. raise the price of its product c. reduce production without shutting down d. shut down (reduce output to zero) e. do nothing (it is currently maximizing profit)