Consider a System in Which a Person Earning $10, 000

question 165

Multiple Choice

Consider a system in which a person earning $10, 000 pays $1, 000 in taxes, a person earning $25, 000 pays $2, 000, and someone earning $60, 000 pays $4, 000.What type of tax is this?

• A)progressive
• B)proportional
• C)regressive
• D)property tax
• E)one based on the benefits principle of taxation

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Definitions:

Linear Demand

A type of demand where there is a constant relationship between the quantity demanded and price, represented by a straight line on a graph.

Price Inelastic

A situation in which the demand for a good does not change significantly in response to a change in price, indicating that consumers are less sensitive to price changes.

Linear

A term used to describe something that forms a straight line or a process that proceeds in steps of equal increments.

Downward-Sloping

A term often used to describe a curve or line on a graph that decreases from left to right, indicating a negative relationship between two variables.