Progressive Taxes Can Be Justified as Fair Based on Which

question 123

Multiple Choice

Progressive taxes can be justified as fair based on which of the following?

• A) horizontal equity
• B) vertical equity
• C) benefits received
• D) index of fairness principle
• E) None of the above answers is correct.

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Definitions:

Deadweight Loss

Deadweight loss is a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Marginal Cost

The increase or decrease in the total cost incurred by producing one additional unit of a product or service.

Socially Efficient

A situation in which resources are allocated in a way that maximizes the welfare of society as a whole.

Price Discriminating

A pricing strategy that involves charging different prices for the same product or service to different customers, based on what the seller believes each customer can afford or is willing to pay.