There Are Two Divorce Laws, a and B

question 149

Multiple Choice

There are two divorce laws, A and B. Under A, it takes only one person to agree to a divorce and the divorce is granted. Under B, it takes two persons to agree to a divorce before it is granted. According to Coase,

• A)there will be the same number of divorces under both laws if transaction costs are zero.
• B)there will be more divorces under law A.
• C)there will be more divorces under law B.
• D)taxes should be imposed on those parties who seek divorces.
• E)subsidies should be granted to those persons who unwillingly get divorces.

---

Definitions:

Form 1040EZ

A simplified U.S. federal income tax form for single and joint filers with no dependents that was used to report taxable income under certain conditions, now discontinued.

IRS

The Internal Revenue Service is an agency of the United States federal government that is tasked with collecting taxes and implementing tax legislation.

Tax Liability

The total amount of tax owed by an individual or business to federal, state, or local tax authorities.

Income Tax Formula

A mathematical equation used to calculate the amount of taxes owed to the government based on income earned, after accounting for deductions and exemptions.