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:

Labour Hours

The total amount of working time executed by employees, usually measured in hours, for producing goods or delivering services.

Incremental Value

The additional financial worth generated as a result of a specific action or decision.

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Companies that finance their operations without any debt, relying solely on equity.

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The total number of a company's shares that are held by shareholders, including restricted shares owned by the company’s officers and insiders.