For the Utility Function U(X,Y) = X⁰

question 52

Multiple Choice

For the utility function U(X,Y) = X^0.75Y^0.25, the marginal utility of Y is:

• A) 0.75X^0.75Y^0.25.
• B) 0.25X^0.75Y^0.25.
• C) 0.75X^-0.25Y^0.25.
• D) 0.25X^0.75Y^-0.75.

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Definitions:

Tax System

The structured way in which taxes are imposed in a country, including the collection of taxes from individuals and businesses.

Progressive

Referring to a tax system in which the tax rate increases as the taxable amount increases, leading to higher earners paying a higher percentage of their income in taxes.

Regressive

A term often used to describe a tax system where the tax rate decreases as the taxable amount increases, effectively placing a greater burden on those with lower incomes.

Benefits-Received Principle

An approach to funding public goods and services where payments are made by those who benefit from them, matching payment to benefit received.