The Claim That All Citizens Should Make an "Equal Sacrifice

question 10

Multiple Choice

The claim that all citizens should make an "equal sacrifice" to support government programs is usually associated with

• A)the ability-to-pay principle.
• B)the benefits principle.
• C)efficiency arguments.
• D)regressive tax arguments.

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Definitions:

Homothetic Preferences

Preferences where if a consumer prefers a bundle of goods A to B, they will also prefer a scaled-up version of A to the same scale-up of B, maintaining the same proportions.

Marginal Rate of Substitution

How quickly a consumer agrees to trade one good for another, aiming to keep their level of pleasure steady.

Edgeworth Box

A diagram used in economics to show the distribution of resources, illustrating how different mixes of goods can lead to an optimal allocation.

Competitive Equilibrium

A state in a competitive market where supply equals demand, and the market clears at a price where no participant has an incentive to change their behavior.