Refer to the Figure Below A)3; 3
B)1; 3
C)4; 2
D)3; 2

question 65

Multiple Choice

Refer to the figure below. If the price of Good A is $5 and the price of Good B is $4, then the rational spending rule is satisfied when the consumer purchases ______ units of Good A and ______ units of Good B. $$\begin{array} { | c | c | c | } \hline \text { Units } & \begin{array} { c } \text { Marginal Utility } \\\text { of Good A }\end{array} & \begin{array} { c } \text { Marginal Utility } \\\text { of Good B }\end{array} \\\hline 1 & 30 & 40 \\\hline 2 & 27 & 33 \\\hline 3 & 15 & 24 \\\hline 4 & 8 & 14 \\\hline\end{array}$$

• A)3; 3
• B)1; 3
• C)4; 2
• D)3; 2

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Definitions:

Ability-To-Pay Principle

A taxation principle suggesting that taxes should be levied according to an individual's or entity's capability to bear the tax burden.

Tax Revenue

The income gained by governments through taxation.

Income Taxes

Taxes levied by governments on individuals or entities' income, affecting the amount of money they retain from earnings.

Benefits Principle

A taxation theory that suggests individuals should pay taxes based on the benefits they receive from government services.