Joe and Fred Are Economists

question 11

Multiple Choice

Joe and Fred are economists.Joe thinks that the wealthiest 10% of the US population should be taxed a rate higher than the rest of society because they can better afford it.Fred thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success.In this example,Joe and Fred

• A)disagree about the validity of a positive theory.
• B)have different normative views about tax policy.
• C)must both be incorrect because tax policy is never that simple.
• D)None of the above is correct.

---

Definitions:

Standard Unit Price

A predetermined or established cost that represents an expected or typical amount to be charged or incurred per unit of product or service.

Actual Unit Price

The real cost of a single unit of a product or service, as incurred or experienced in a transaction.

Standard Quantity

The estimated amount of materials or resources expected to be used during a production process under normal conditions.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services.