The property tax may be regressive even though wealthy people own much more taxable property than do poor people. This possibility arises because:
A. marginal and average tax rates on property tend to converge.
B. wealthy people can evade property taxes while poor people cannot.
C. property taxes on rental property and business property are shifted.
D. statutory property tax rates decline as the value of property rises.
Answer: C
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Improvements in technology provide benefits to:
A) consumers, through lower prices. B) workers, although some jobs may be eliminated. C) firms, through lower production costs. D) all of the above.
Suppose a company expects prices in general to rise by 5%, but the price of its product rises by 2%. How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.