Consider a Public Good Such as Fire Protection Services

question 148

Multiple Choice

Consider a public good such as fire protection services.Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property.In this case

• A)the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle.
• B)the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle.
• C)both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor.
• D)neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.

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Definitions:

Residuals

Differences between observed and predicted values in a statistical model, representing unexplained variation.

Predicted Values

Estimates or forecasts of a variable or outcome based on a model or analysis of correlated variables.

Actual Y Values

The observed values of the dependent variable in a data set or experiment, compared against predicted values in regression analysis.

Estimated Regression Line

A line calculated from the data that best fits the relationship between the independent variable(s) and the dependent variable, used to predict the value of the dependent variable from the independent variable(s).