Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 21A, Problem 1E
To determine
(a)
To rank: the given combinations in the order of preference.
Expert Solution
Explanation of Solution
1st preference is "I" as both goods are more.
2nd preference is F and H, as 5 goods in total for each combination.
3rd preference is C, E and G, as 4 goods in each combination.
4th preference is B and D as 3 goods in total for each combination.
5th preference is A as lowest combination of goods is given.
To determine
(b)
Combinations which cannot be ranked along with the reason.
Expert Solution
Explanation of Solution
2nd preference: F and H, 5 goods are given for each combination.
3rd preference: C, E and G, 4 goods are given for each combination.
4th preference: B and D, 3 goods are given for each combination.
A consumer is indifferent for the respective combinations in each preference as there is no information given about price and utility.
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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
answer
Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
Chapter 21A Solutions
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