The Principle That Those Earning Higher Incomes or Those Owning

question 213

Multiple Choice

The principle that those earning higher incomes or those owning more property should pay more taxes is known as:

• A)The ability-to-pay principle
• B)The progressive tax principle
• C)The proportional tax principle
• D)The regressive tax principle
• E)The desire of the government to spend more funds

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Definitions:

Competitive Price-Searcher Market

A market in which the firms have a downward-sloping demand curve, and entry into and exit from the market are relatively easy.

Positive Economic Profit

Earnings that exceed both the explicit and implicit costs of a company, indicating a financial gain beyond the normal expectations of profit.

Maximum Economic Profit

The highest possible financial gain obtainable by a firm when total revenue exceeds both explicit and implicit costs.

Competitive

Characterized by rivalry, where entities vie against each other to achieve or win something, such as market share or high performance.