If marginal cost of growing wheat, MC, just reaches $4 per bushel and if the expected price of wheat Pis $4, a farmer
A. should produce at that exact level at which MC= P and if AVC< MC.
B. should check her/his average variable cost to see if P covers AVC.
C. should stop producing if AVC> 4.
D. All of the above.
Ans: D. All of the above.
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Consider a world with two income earners and an income tax. Individual A earns $25,000 and pays $1,000 in taxes. Individual B earns $100,000 and pays $4,000 in taxes. Which of the following best classifies the income tax system in this world?
a. proportional b. progressive c. regressive d. sumptuary
In a progressive income tax system,
A) the marginal tax rate exceeds the average tax rate. B) the average tax rate exceeds the marginal tax rate. C) high income earners pay a lower percentage of their income in taxes than do low income earners. D) the tax rate depends solely on how long an individual has been in the labor force.