Refer to Figure 4-5. What is the area that represents the portion of producer surplus transferred to consumers as a result of the rent ceiling?

Suppose that a person in the United States earns $5,000 and faces an income tax rate of 25 percent. If that person saves $2,000 and invests it at 12 percent then he or she will pay

A) less in taxes because of the saving. B) tax only on the income spent. C) more in taxes than if there had been no saving. D) tax only on the amount saved.

A major distinguishing feature between capitalist and socialist (or command) economies is that

a. under capitalism the average citizen is always wealthier than in socialist economies b. decision making is typically decentralized in socialist economies and is centralized in capitalist economies c. socialist countries all have red flags and capitalistic economies do not d. resources are publicly owned in capitalist economies e. decision making is typically decentralized under capitalism while it is centralized in command economies