If Revenue from a Cigarette Tax Is Used to Pay

question 467

Multiple Choice

If revenue from a cigarette tax is used to pay for healthcare for people with lung cancer, the cigarette tax may be justified on the basis of

• A)the benefits principle.
• B)the ability-to-pay principle.
• C)vertical equity.
• D)horizontal equity.

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Definitions:

Nominal Wage

The amount of money received by a worker per unit of time (hour, day, etc.); money wage.

Real Wage

The amount of goods and services a worker can purchase with his or her nominal wage; the purchasing power of the nominal wage.

Agency Shops

A workplace agreement where employees, whether or not they are union members, must pay union fees for the bargaining services the union provides.

Open Shops

Workplaces where union membership is not required as a condition of employment.