All Else Equal, the Higher the Price, The________ the Consumer

question 172

Multiple Choice

All else equal, the higher the price, the________ the consumer surplus and the _________ the producer surplus.

• A)higher; higher
• B)lower; lower
• C)higher; lower
• D)lower; higher

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Definitions:

Ability-To-Pay Principle

A tax principle that states taxes should be levied based on the taxpayer’s ability to pay, meaning higher-income individuals should pay more in taxes than lower-income individuals.

Government Employment

Employment within governmental bodies, including all levels from local to federal.

Labor Force

The sum of individuals in the workforce, comprising both those who are employed and those who are actively looking for work.

State and Local Levels

Refers to the governance and administrative structures that operate below the national level, including state, provincial, or regional governments and local municipalities.