Which of the Following Is True for Taxes? They

question 254

Multiple Choice

Which of the following is true for taxes? They

• A) are always administered fairly.
• B) are a necessary part of living in an economy with a fair distribution of income.
• C) are always administered without creating unfairness or inefficiency.
• D) are an involuntary transfer of private property.
• E) do not create a big tradeoff problem.

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Definitions:

User Cost

The cost of using a durable good or asset, which includes depreciation, interest lost on funds used to buy the asset, and maintenance costs.

Nonrenewable Resources

Natural resources that cannot be replenished within a human lifetime, such as fossil fuels or minerals.

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Extracting

The process of obtaining raw materials from the natural environment for use in the production of goods or services.