According to Coase, the Optimal Allocation of Resources Is Guided

question 141

Multiple Choice

According to Coase, the optimal allocation of resources is guided by

• A)the decisions of a firm's managers
• B)market prices when market transaction costs are greater than the firm's internal organization costs
• C)the decisions of a firm's managers when market transaction costs are greater than the firm's internal organization costs
• D)the decisions of a firm's managers when market transaction costs are less than the firm's internal organization costs
• E)entrepreneurs

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Definitions:

Neutral Tax

A tax system that is designed to have a neutral impact on the economic choices and behaviors of individuals and businesses, not favoring one decision over another.

Progressive Tax

A tax system where the rate increases as the taxable amount rises, aiming to reduce the tax burden on individuals who have a lower ability to pay.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer’s income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Regressive Tax

A tax applied uniformly, taking a larger percentage of income from low-income earners than from high-income earners, considered to be inversely proportional to the taxpayer's ability to pay.