Explanation A tax is a unilateral payment received from the public that is paid to the government on various grounds such as for an income earned, property owned, on profession in which an individual is employed, and so on. The ground makes it income tax, property tax, professional tax, and so on. Option (c): The income tax is the tax paid by the individual to the government on the basis of the income earned by an individual. The negative income tax is the method of paying money as assistance to the families earning, which is an income below a certain level. When people work more, people earn more. Therefore, the after tax income of the family would increase and this would reduce the negative income tax of the economy. Thus, the incentive to work is considered as an important ingredient of the negative income tax. Hence, option 'c' is the correct answer. Option (a): When the families work more, they will earn more income. This means that the family income would rise. However, the family would be out of the program only when the income increases beyond the government determined level...

The incentive to work and the negative income tax.

Economics For Today

10th Edition

ISBN: 9781337613040

Author: Tucker

Publisher: Cengage Learning

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Chapter 12, Problem 20SQ

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Chapter 12, Problem 19SQ

Chapter 13.2, Problem 1YTE

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Use the following table to work Problems 5 to 9. Minnie's Mineral Springs, a single-price monopoly, faces the market demand schedule: Price Quantity demanded (dollars per bottle) 10 8 (bottles per hour) 0 1 6 2 4 3 2 4 0 5 5. a. Calculate Minnie's total revenue schedule. b. Calculate its marginal revenue schedule. 6. a. Draw a graph of the market demand curve and Minnie's marginal revenue curve. b. Why is Minnie's marginal revenue less than the price? 7. a. At what price is Minnie's total revenue maxi- mized? b. Over what range of prices is the demand for water from Minnie's Mineral Springs elastic? 8. Why will Minnie not produce a quantity at which the market demand for water is inelastic?
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