According to dynamic tax analysis, continually increasing the tax rate will eventually
A) cause an increase in the tax base.
B) have no impact on the tax base.
C) cause a decrease in the tax base.
D) result in an initial decrease in the tax base followed ultimately by a rise in the tax base.
C
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If you are assigned the role of Player A in the Ultimatum game and you propose that player B gets $1 and you get $99
a. you are behaving as a rational wealth-maximizer and player B is likely to accept your offer. b. you are behaving as a rational wealth-maximizer and player B is likely to reject your offer. c. you are not behaving as a rational wealth-maximizer and player B is likely to accept your offer. d. you are not behaving as a rational wealth-maximizer and player B is likely to reject your offer.
If fewer families purchase health insurance because of rising health insurance premiums, then health insurance premiums are likely to rise further due to:
A. commitment problems. B. moral hazard. C. adverse selection. D. first-dollar coverage.