Suppose a country imposes a lump-sum income tax of $5,000 on each individual in the country. What is the average income tax rate for an individual who earns $40,000 during the year?
a. 0%
b. 10%
c. More than 10%
d. The average tax rate cannot be determined without knowing the entire tax schedule.
c
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Which of the following is true of the law of supply?
a. The law of supply is the sole determinant of market prices. b. The law of supply states that as the price of a good rises, the quantity supplied rises. c. The law of supply holds good only in the long-run. d. The law of supply is valid only in a market system of allocation. e. The law of supply asserts that as the cost of producing a good rises, the quantity supplied rises.
The expected rate of return from an investment is:
A. Only the rate that compensates for time preference B. Only the rate that compensates for risk C. The rate that compensates for time preference plus the rate that compensates for risk D. The rate that compensates for time preference minus the rate that compensates for risk