Which of the Following Taxes Causes the Greatest Shift of the Lorenz

question 75

Multiple Choice

Which of the following taxes causes the greatest shift of the Lorenz curve toward the line of equality?

• A) Flat- rate income tax
• B) Regressive income tax
• C) Progressive income tax
• D) Proportional income tax

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Definitions:

Downward Sloping

Describes a curve or line on a graph that shows a decrease in one variable as another variable increases, typical of demand curves in economics.

Aluminum Cans

Containers made from aluminum used for packaging beverages and food items.

Long-run Average Total Cost

A metric reflecting the per-unit cost of producing a certain output level, considering all variable and fixed costs over time.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.