The Demand Curve for a Good Is Horizontal When It

question 165

Multiple Choice

The demand curve for a good is horizontal when it is:

• A) a perfectly inelastic good.
• B) a unitary elastic good.
• C) a perfectly elastic good.
• D) an inferior good.

---

Definitions:

Social Security (FICA) Tax

A mandatory payroll tax funded by both employers and employees to finance Social Security benefits.

Annual Income

The total amount of money earned by an individual or entity within a year from all sources, including wages, salaries, bonuses, and investments.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer’s income is taxed, indicating the proportion of additional income that is paid in taxes.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation.