Use the Following Two Statements to Answer This Question

question 34

Multiple Choice

Use the following two statements to answer this question:
I. According to the three basic assumptions regarding people's preferences, a person will always prefer to earn a living through honest work rather than a life of crime.
II. When we say that preferences are complete, we mean that if a consumer prefers market basket A to market basket B, and prefers market basket B to market basket C, then the consumer prefers market basket A to market basket C.

• A) Both I and II are true.
• B) I is true and II is false.
• C) I is false and II is true.
• D) Both I and II are false.

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Definitions:

Sales Tax

A tax imposed on sales of goods and services, typically calculated as a percentage of the purchase price and collected by the retailer.

Progressive Tax System

A taxation system where the tax rate increases as the taxable amount or income increases, meaning higher-income individuals pay a larger percentage of their income in taxes than lower-income individuals.

Net Taxes

The difference between the total taxes paid to government entities and any transfers or subsidies received, representing the actual tax burden.