If the tax function is given by T = – 20 + 0.1Y the average tax rate would
a. be 0.1.
b. fall as income falls.
c. vary negatively with income.
d. be – 20 + 0.1.
e. none of the above
B
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Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that repealing the tax preference for employer-provided health insurance would
A) increase overall spending on health care as consumers would have to pay a higher price for medical services. B) reduce spending by people enrolled in these programs by 33 percent. C) significantly reduce the effectiveness of the health care received by those enrolled in these programs. D) drive up prices for health care coverage since insurance reimbursements to doctors would be reduced.
Elasticity of demand equals the ratio of the percentage change in the price of a good to the percentage change in the quantity demanded.
Answer the following statement true (T) or false (F)