Under a Flat Tax System, a Person Earning an Additional

question 60

Multiple Choice

Under a flat tax system, a person earning an additional 10% in income has to pay:

• A) 10% less in income tax.
• B) the same amount of income tax.
• C) 10% more in income tax.
• D) more than 10% more in income tax.

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Definitions:

Excess Goods

Products that exceed the demand in the market, often leading to surplus and potential waste.

Perfect Substitutes

Two goods that could be used in place of one another with no loss of utility to the consumer.

Utility Function

A mathematical representation of how different combinations of goods or services produce varying levels of satisfaction or utility to a consumer.

Commodities

Fundamental commodities traded in business that can be exchanged with others of alike kind.