When the Government Increases Taxes to Provide Traditional Public Goods

question 102

Multiple Choice

When the government increases taxes to provide traditional public goods, such as national security, there tends to be

• A)widespread benefits and costs
• B)widespread costs and concentrated benefits
• C)concentrated benefits and costs
• D)widespread benefits and concentrated costs
• E)widespread costs and either widespread or concentrated benefits

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Definitions:

Equilibrium Quantity

The quantity of a good or service at which demand and supply are equal at a particular price level, leading to a stable market situation.

Quantity Supplied

The quantity of a product or service that suppliers are prepared to offer for sale at a particular price during a certain timeframe.

Minimum Wage

The lowest legal amount that an employer is permitted to pay an employee for work, usually set by government policy.

Expectations

Anticipations about the future, influencing economic agents’ decisions in markets.