If You and I Agree to Exchange Four Ginger Snaps

question 120

Multiple Choice

If you and I agree to exchange four ginger snaps for one chocolate chip cookie, then it must be true that

• A)we are both at least as well off as we were before
• B)I am better off than I was before, but you are not
• C)you are better off than you were before, but I am not
• D)we are both better off than before
• E)we are both worse off than before

Recognize the benefits-received principle in taxation.

Understand the administrative costs and deadweight loss associated with taxation.

Evaluate the fairness of a tax system based on its structure.

Appreciate the role of marginal and average tax rates in tax systems.

---

Definitions:

Securities Act of 1934

A U.S. federal law governing the secondary trading of securities (stocks, bonds, and debentures) to protect investors against malpractice.

Tender Offer

A public offer made by a person or company to purchase shares from shareholders, typically at a premium to market price, in an attempt to take control of the company.

Crowdfunding

The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.

Internet

A vast network that connects computers across the world, allowing for the sharing and transmission of data and information.