Which Statement Is CORRECT

question 221

Multiple Choice

Which statement is CORRECT?

• A)If the government can make the tax system fairer without sacrificing efficiency,it should do so to maximize equity.
• B)If the government can make the tax system fairer without sacrificing efficiency,then the existing tax system is perfectly designed.
• C)There is no trade-off between equity and efficiency in the tax system.
• D)If the government can make the tax system fairer without sacrificing efficiency,it should seek to maximize equity at the expense of efficiency.

---

Definitions:

Economic Profits

The variance between gross income and total costs, considering both explicit and implicit expenses.

Long-Run Market Adjustments

Changes that firms or entire industries undergo over an extended period in response to shifts in demand, technology, and competitive landscapes.

Representative Firm

A theoretical concept or model used to represent the average or typical firm within an industry, often for analytical purposes.

Decrease in Demand

A downward shift in the demand curve, indicating that consumers now want to purchase less of a good at all price levels.