If Rochelle earns an annual salary of $100,000 and David earns $75,000 annually and a tax is imposed on Rochelle and David, according to the ability-to-pay principle, Rochelle and David should pay the same amount in taxes. Rochelle should pay more of the tax. neither should have to pay the tax. David should pay more of the tax.

If Rochelle earns an annual salary of $100,000 and David earns $75,000 annually and a tax is imposed on Rochelle and David, according to the ability-to-pay principle, Rochelle and David should pay the same amount in taxes. Rochelle should pay more of the tax. neither should have to pay the tax. David should pay more of the tax.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 9MC

See similar textbooks

Similar questions

why do comsumers pay the tax on goods if the elasticity of demand is less than the elasticty of supply?
You bought a ticket to see Hans Zimmer for $100 next week. You can sell this ticket last minute on Ticketswap for $40. You would have been willing to pay $140 for seeing Hans Zimmer. Enya will play on the same evening, and you won a free ticket for this show, which you cannot sell. The tickets for this show normally cost $50. You are willing to pay a maximum of $80 for the concert of Enya. To which concert should you go and how high are your "economic rents" in this case? The answer is: Hans Zimmer, $20. Could someone explain why?
Suppose you earned $60,000 per year and pay taxes based on marginal tax rates. The first tax bracket which taxes at 10% ranges from zero dollars to $30,000. The second tax bracket which tax at 25% ranges from 30,001 to $120,000. How much will you pay in total taxes?
The tax on cigarettes in New York City is one of the highest in the nation—$5.85 per pack. What are some of the secondary effects of this tax? Check all that apply.
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
The local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $5.00 a box. The lettuce is sold for $15.00 a box and the dealer that sells old lettuce is willing to pay $1.60 a box. Past history says that tomorrow's demand for lettuce averages 240 boxes with a standard deviation of 36 boxes. How many boxes of lettuce should the supermarket purchase tomorrow?
Suggest a relevant government policy that would help with tax dodgers
Amrin goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Amrin's consumer surplus from the purchase is
MicroEco.
How a Pigovian tax affects consumers? Please support your explanation based on a figure.
What is the difference between evading and avoiding a tax obligation?
Suppose that Ty, George, Joe, and Ted are potential buyers of a rare Honus Wagner baseball card. Each will buy either one card or zero cards. Ty's benefit from owning the card is $500,000; George's benefit is $400,000; Joe's benefit is $300,000; and Ted's benefit is $200,000. What is total consumer surplus if the price of a Honus Wagner card is $250,000? $450,000 $350,000 $250,000 $150,000