-The Above Figure Shows the Market for Gasoline

question 464

Multiple Choice

-The above figure shows the market for gasoline. When a hurricane destroys a major refinery that refines oil into gasoline, the

• A) demand curve for gasoline shifts from D₁ to D₂ and the supply curve of gasoline does not shift.
• B) demand curve for gasoline shifts from D₁ to D₂ and the supply curve of gasoline shifts from S₂ to S₁.
• C) demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S₂ to S₁.
• D) demand curve for gasoline does not shift, and the supply curve of gasoline shifts from S₁ to S₂.

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Definitions:

Marginal Tax Rate

The tax rate that applies to the next dollar of taxable income; the percentage of tax applied to your income for each tax bracket in which you qualify.

Taxable Income

The amount of income that is subject to tax, after all allowable deductions, exemptions, and adjustments.

Average Tax Rate

The ratio of the total amount of taxes paid to the total income, showing the percentage of income paid in taxes.

Progressive Tax

A taxation system where the tax rate increases as the taxable amount (income or profits) increases, making it proportionately more taxing on higher earners.