The sales tax

A) is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.
B) is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
C) is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
D) is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.

C

Economics

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Refer to Figure 4.1. The dominant strategy for Alvin is

A) Top B) Bottom C) both Top and Bottom D) Alvin does not have a dominant strategy.

Economics

Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product increases. Which of the following statements accurately predicts the resulting increase in price?

A) The more elastic the supply curve, the greater the price increase. B) The increase in price is not affected by the elasticity of the supply curve. C) The more elastic the supply curve, the smaller the price increase. D) There will be no increase in price if the supply curve is perfectly inelastic.

Economics