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 $3,000 in taxes. Which of the following best classifies the income tax system in this world?

The slope of the production possibility frontier shows

a. how inputs must be changed to keep them fully employed. b. the technically efficient combinations of the two goods. c. how demanders are willing to trade one good for another. d. the opportunity cost of one good in terms of the other.

In the simple circular-flow diagram, with households and firms, GDP can be computed a. as the income received by households, in the form of wages, rent and profit. b. as the income received by households in the form of wages

c. as the payments made by firms for labor. d. as the profits received by households.