If Revenue from a Gasoline Tax Is Used to Build

question 188

Multiple Choice

If revenue from a gasoline tax is used to build and maintain public roads, the gasoline 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:

Comparative Advantage

The ability of an entity (could be a person, company, or country) to produce a good or service at a lower opportunity cost than another.

Domestic Prices

Relates to the cost of goods and services within a country's borders, which can be influenced by factors such as supply and demand, taxation, and government policies.

Euros

The official currency of the Eurozone, which is used by 19 of the 27 European Union member countries.

Tariff

A tax on imports.