Recall Application 3, "Is a VAT in Our Future?" to Answer

question 142

Multiple Choice

Recall Application 3, "Is a VAT in our Future?" to answer the following questions.
-According to the application, which industrialized country does not have a value- added tax (VAT) ?

• A) Canada
• B) the U.S.
• C) the U.K.
• D) all of the above are correct.

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Definitions:

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is distributed to yield the highest aggregate utility.

Willingness To Pay

The maximum amount a consumer is prepared to spend to acquire a good or service.

Acceptable Price

The price at which consumers feel they are getting good value for the products or services purchased.

Allocative Efficiency

A state of resource distribution where it is impossible to make any one individual better off without making someone else worse off, maximizing social welfare.