Consider two people, Sandy Roos, who earns $25,000 . and Gary Behrman, who earns $50,000 . If the government has decided to tax everyone's first $25,000 at 20 percent and everyone's second $25,000 at 40 percent, then Gary pays
a. $10,000 in taxes and Sandy pays $5,000 in taxes
b. $10,000 in taxes and Sandy pays $10,000 in taxes
c. $15,000 in taxes and Sandy pays $5,000 in taxes
d. $15,000 in taxes and Sandy pays $10,000 in taxes
e. $17,000 in taxes and Sandy pays $5,000 in taxes
C
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The longer the time period considered, the price elasticity of demand tends to: a. decrease
b. remain constant. c. increase. d. converge to zero.
The main difference between sales and excise taxes is that:
A. sales taxes apply to a wide range of products, while excise taxes apply only to a select group of products. B. excise taxes apply to a wide range of products, while sales taxes apply only to a select list of products. C. sales taxes are consumption taxes, while excise taxes are not. D. excise taxes are consumption taxes, while sales taxes are not.