If the government proposed a one-time tax of 25% on accumulated wealth, this would likely
A) reduce the incentive for individuals to accumulate wealth.
B) increase the incentive for individuals to accumulate wealth.
C) have no impact on individual accumulation of wealth since it is a one-time tax.
D) All of the above are equally likely to happen.
A
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Suppose the local government is considering using marginal cost pricing to set rates for a cable TV company. Which of the following arguments supports marginal cost pricing?
a. Marginal cost pricing gives the monopoly economic profit and a reason to stay in business. b. Marginal cost pricing gives the firm a normal economic profit and a reason to stay in business. c. Marginal cost pricing is allocatively efficient. d. Average cost pricing requires subsidies, which can be costly. e. Average cost pricing forces monopolies to operate at a loss.
The real interest rate is:
A. the percentage increase in money that the lender receives on a loan. B. the percentage increase in purchasing power that the lender receives on a loan. C. also called the after-tax interest rate. D. usually higher than the nominal interest rate.