What Does a Tax System Based on the Ability-To-Pay Principle

question 188

Multiple Choice

What does a tax system based on the ability-to-pay principle claim

• A)All citizens should pay taxes based on the benefits they receive from government services.
• B)All citizens should pay the same amount in taxes.
• C)All citizens should pay taxes on only the income spent.
• D)All citizens should make an equal sacrifice.

---

Definitions:

Pure Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price taking behavior.

Monopolistic Competition

A market structure where many firms sell products that are similar but not identical, leading to competition based on quality, price, and marketing.

Economic Profits

The surplus or financial gains achieved by a firm or an individual after accounting for all explicit and implicit costs.

ATC Curve

The Average Total Cost curve in economics represents the total cost per unit of output, including both fixed and variable costs.