The Question of How People's Behavior Changes in Response to Taxes

question 70

Multiple Choice

The question of how people's behavior changes in response to taxes is:

• A)has been studied and is well known today.
• B)the subject of much research.
• C)was generally accepted and has recently come under examination again.
• D)None of these statements is true.

---

Definitions:

Demand for Y

The desire and willingness of consumers to purchase a specific quantity of a good 'Y' at various prices during a certain period.

Utility Function

A mathematical representation of how a consumer ranks different bundles of goods based on the level of satisfaction (utility) they provide.

Consumption

The action of using up a resource or goods and services being used by consumers.

Saving

The portion of income not spent on current consumption but reserved for future use.