A Temporary Factor-Price Differential Is One Which

question 93

Multiple Choice

A temporary factor-price differential is one which

• A)will tend to be eliminated in the long run.
• B)will hamper the reallocation of resources from declining to growing industries.
• C)derives from intrinsic differences in the factors themselves.
• D)will reflect a permanent state of disequilibrium.
• E)is seldom self-eliminating.

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Definitions:

Income Tax

A government levy on individuals' or corporations' earnings.

Marginal Tax Rate

The rate of tax applied to the last dollar of income, indicating how much of any additional income will be taken as tax.

Lump-Sum Tax

A tax that is a set amount, no matter the taxpayer's income level or economic activity.

Proportional Tax

A taxation framework where the same rate is consistently applied to everyone, with no variation based on the amount of income.