Match Each Term with the Correct Statement Below

question 150

Multiple Choice

Match each term with the correct statement below.
-A tax rate that decreases as the tax base increases.

• A)Average tax rate
• B)Effective tax rate
• C)Horizontal equity
• D)Marginal tax rate
• E)Progressive rate structure
• F)Proportional rate structure
• G)Regressive rate structure
• H)Tax avoidance
• I)Tax evasion
• J)Vertical equity

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Definitions:

Deductibles

The amount paid out of pocket by the policyholder before an insurance policy begins to cover expenses.

Consumer Surplus

The difference between the maximum price a consumer is (or consumers are) willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price.

Willing To Pay

The maximum amount an individual is prepared to spend to purchase a good or service or to avoid something undesirable.

Moral Hazard

A situation in economics where one party is willing to take risks because the costs that could result will not be borne by that party.