-Refer to Figure 8-2

question 175

Multiple Choice

-Refer to Figure 8-2. Why is the total revenue curve a ray from the origin?

• A) because revenue increases at an increasing rate
• B) because revenue increases at a decreasing rate
• C) because the firm can sell its product at a constant price
• D) because the firm must lower its price to sell more

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Definitions:

Average Tax Rates

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), indicating the percentage of income that goes to taxes.

Unemployment Compensation

Financial payments made to individuals who have lost their job through no fault of their own, intended to provide a temporary source of income.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting those with lower incomes.

Social Security Tax

A payroll tax collected to fund the Social Security program, charged to both employers and employees.