Some Colleges Charge All Students the Same Fee for Access

question 13

Multiple Choice

Some colleges charge all students the same fee for access to campus computing services. Suppose that students differ by how many hours of campus computing services they use. For example, some students print all their papers and assignment in the campus computer labs, while others use their own printers in their apartments. The computing services fee is most like a(n)

• A)excise tax that conforms to the benefits principle.
• B)excise tax that violates the benefits principle.
• C)lump-sum tax that conforms to the benefits principle.
• D)lump-sum tax that violates the benefits principle.

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Definitions:

Price

The financial expenditure involved in obtaining a product or service.

Competitive Industry

An industry characterized by many firms, free entry and exit, and a product for which every seller is a price taker.

Perfectly Elastic

A situation in which the quantity demanded or supplied changes infinitely in response to any change in price, represented by a horizontal demand or supply curve.

Input Prices

The cost of resources used in the production process, including labor, materials, and capital.