The benefit principle views _____
a. a tax as the price that is paid for a government-supplied activity
b. all government activity as beneficial
c. all taxes as being beneficial if they are spent in the public interest
d. all Pareto-efficient moves as beneficial
a
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Everything else held constant, if the expected return on RST stock declines from 12 to 9 percent and the expected return on XYZ stock declines from 8 to 7 percent, then the expected return of holding RST stock ________ relative to XYZ stock and
demand for XYZ stock ________. A) rises; rises B) rises; falls C) falls; rises D) falls; falls
An individual has preferences consistent with standard expected utility theory. They have utility function U(x) over wealth x. Starting with initial wealth of $10,000, the person is then faced with two choice problems. The first involves a choice between (A) no gamble and (B) a gamble with an equal chance of winning $1,800 and losing $1,000 . The second choice problem, the person first has $1,000
taken away (resulting in the adjustment of the reference point). The choice is then between (C) being given back $1,000 for sure and (D) an equal chance of winning $2,800 or nothing. What can be said about the choices the person would make? a. The person would never choose both A and D. b. The person would never choose both A and C. c. The person would choose A and D. d. The person would choose A and C.