With a lump-sum tax,the average tax rate for high income taxpayers will be
a. the same as the average tax rate for low income taxpayers.
b. lower than the average tax rate for low income taxpayers.
c. higher than the average tax rate for high income taxpayers.
d. Any of the above could be true under a regressive tax system.
b
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Tennis balls and tennis rackets are complements. If a 3 percent change in the price of a tennis racket leads to a 9 change in the quantity of tennis balls demanded, the cross elasticity of demand equals
A) 3. B) -3. C) 1/3. D) -1/3. E) 9.
A basic problem with the infant-industry argument is that:
a. most industries need protection when they are mature, not when they are first established. b. the amount of the tariff is unlikely to have much impact on the success of an infant industry. c. political pressure will likely prevent the withdrawal of the tariff when the industry matures. d. domestic consumers will continue to buy the foreign products anyway, regardless of the tariff.