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    suppose the government decides to raise the gasoline tax as a way to reduce air pollution and traffic congestion to their optimal levels. which of the following describes why corrective taxes, such as the gasoline tax, are unlike most other taxes?

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    Suppose the government decides to raise the gasoline tax a way to reduce air pollution and traffic congestion to their optimal levels. Which of the following describes why corrective taxes, such as th

    Answer to: Suppose the government decides to raise the gasoline tax a way to reduce air pollution and traffic congestion to their optimal levels....

    Progressive tax

    Suppose the government decides to raise the gasoline tax a way to reduce air pollution and...

    Suppose the government decides to raise the gasoline tax a way to reduce air pollution and... Question:

    Suppose the government decides to raise the gasoline tax a way to reduce air pollution and traffic congestion to their optimal levels.

    Which of the following describes why corrective taxes, such as the gasoline tax, are unlike other taxes?

    a. Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency.

    b. Other taxes get passed on from business to consumers, whereas corrective taxes do not.

    c. Corrective taxes alter incentives, whereas other taxes typically do not.

    d. Other taxes are typically used to cover general spending, but funds from corrective taxes can be used only to alleviate pollution.

    Taxation

    Taxation is referred as the government policy to increase the revenue by setting a higher tax rate. It is a most common and important source of revenue for the government. The expenditure done on infrastructure and education is majorly financed through taxation.

    Answer and Explanation:

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    Option (A) Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency. is correct

    This...

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    Ability-to-Pay Principle of Taxation: Theory & Analysis

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    The ability-to-pay theory, which states that taxes should be based upon the amount of money people earn, is one of the main theories of taxation. Learn more about the theory and analysis, and see real-life examples from the U.S.

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    Approximately what percentage of U.S. national income is paid to workers, as opposed to owners of capital and land?

    Click card to see definition 👆

    70%

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    If firms are competitive and profit maximizing, the demand curve for labor is determined by

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    the value of the marginal product of labor.

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    1/78 Created by alymat12

    Terms in this set (78)

    Approximately what percentage of U.S. national income is paid to workers, as opposed to owners of capital and land?

    70%

    If firms are competitive and profit maximizing, the demand curve for labor is determined by

    the value of the marginal product of labor.

    A bakery operating in competitive markets sells its output for $20 per cake and hires labor at $10 per hour. To maximize profits, it should hire labor until the marginal product of labor is

    1/2 cake per hour

    A technological advance that increases the marginal product of labor shifts the labor ________ curve to the ________.

    demand, right

    Around 1973, the U.S. economy experienced a significant ________ in productivity growth, coupled with a(n) ________ in the growth of real wages.

    slowdown, slowdown

    A storm destroys several factories, thereby reducing the stock of capital. What effect does this event have on factor markets?

    Wages fall, and the rental price of capital rises.

    Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily.

    Indicate how this apple-a-day law would affect each of the following market components.

    -Demand for apples

    -Equilibrium price of apples

    -Marginal product of apple pickers

    -Value of the marginal product of apple pickers

    -Demand for apple pickers

    -Wage of apple pickers

    -Demand for apples: Increase

    -Equilibrium price of apples: Increase

    -Marginal product of apple pickers: No Change

    -Value of the marginal product of apple pickers: Increase

    -Demand for apple pickers: Increase

    -Wage of apple pickers: Increase

    If the price of output rises from $10 to $12 per unit, the labor-demand curve

    shifts to the right

    In what kind of market structure does the firm sell its output?

    Perfectly competitive

    In what kind of market structure does the firm rent robots?

    Perfectly competitive

    Your enterprising uncle opens a sandwich shop that employs 7 people. The employees are paid $6 per hour, and a sandwich sells for $3.

    If your uncle is maximizing his profit, the value of the marginal product of the last worker he hired is _____, and that worker's marginal product is ______ sandwiches per hour.

    $6 2

    Leadbelly Co. sells pencils in a perfectly competitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $150 per day.

    Leadbelly should follow this rule to hire the profit-maximizing amount of labor: Hire workers up to the point where the _______________________ is _____________ $150 per day.

    At the profit-maximizing level of output, the marginal product of the last worker hired is 30 boxes of pencils per day.

    The price of a box of pencils is ____

    Value of the marginal product

    equal to $5

    Suppose that a law required firms to give each worker $3 of fringe benefits for every hour that the worker is employed by the firm.

    The labor-supply curve might shift to the _________ in response to this law because fringe benefits are valuable to workers. This shift in labor supply would result in a _________ wage and _______ quantity than if the supply curve were unchanged.

    Right Lower Higher

    The graphical representation of the relationship between the wage rate and the quantity of labor firms are willing to hire in a market

    Market labor demand curve

    The additional revenue the firm receives from selling the output produced from an additional unit of labor

    Value of the Marginal Product of Labor

    The graphical representation of the relationship between the wage rate and the quantity of labor workers are willing to provide in a

    Market labor supple curve

    The increase in the amount of output from an additional unit of labor

    Marginal product of labor

    Which of the following events may increase the marginal product of labor?

    -Good weather causes an increase in supply and a fall in price for one of the inputs used to make the good

    -A technological improvement that is substitutable for the labor in this market

    -A technological improvement that is complementary for this type of labor

    -A decrease in the wage rate

    -Good weather causes an increase in supply and a fall in price for one of the inputs used to make the good

    -A technological improvement that is complementary for this type of labor

    Which of the following is an example of a positive externality?

    Hillary's newly cut lawn makes her neighborhood more attractive.

    If the production of a good yields a negative externality, then the social-cost curve lies ________ the supply curve, and the socially optimal quantity is ________ than the equilibrium quantity.

    Source : quizlet.com

    Answered: Suppose the government decides to raise…

    Solution for Suppose the government decides to raise the gasoline tax as a way to reduce air pollution and traffic congestion to their optimal levels. Which of…

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    Transcribed Image Text:6. Achieving lower pollution Suppose the government decides to raise the gasoline tax as a way to reduce air pollution and traffic congestion to their optimal levels. Which of the following describes why corrective taxes, such as the gasoline tax, are unlike most other taxes? Other taxes get passed on from businesses to consumers, whereas corrective taxes do not. O Other taxes are typically used to cover general spending, but funds from corrective taxes can be used only to alleviate pollution. O Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency. O Corrective taxes alter incentives, whereas other taxes typically do not.

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