Suppose that in the economy of Springfield, USA, Homer, who has an income of $50,000, pays $10,000 in taxes. Edna, who has an income of $35,000, pays $9,000 in taxes. Based on this information, we could say that Springfield's tax system is

Janelle spends all of her income on songs from iTunes ($1 each) and applications ($5 each) for her iTouch. If she makes her best affordable choice, she purchases 20 songs and 4 applications, what is her real income in terms of applications?

A) 40 applications B) 4 applications C) 10 applications D) 20 songs

A government program would impose a 25-cent tax on each pack of cigarettes in order to fund welfare programs. Such a policy

a. is not a Pareto improvement b. is an example of an economically inefficient economy c. would clearly not increase tax revenues d. is a Pareto improvement e. could only occur in a fair economy