12. A free rider is a person who a. will only purchase a product on sale b. rece
ID: 1123139 • Letter: 1
Question
12. A free rider is a person who a. will only purchase a product on sale b. receives the benefit of a good but avoids paying for it. e. can produce a good at no cost. d. rides public transit regularly 13. The Tragedy of the Commons occurs because a government property is most heavily used by the wealthy b. everyone deserves an equal share of government property. c. social and private incentives differ d. established property rights create competition. 14. A payroll tax is a tax on /the wages that a firm pays its workers b. earned and unearned income. e specific goods like gasoline and cigarettes. d. corporate profits. 15. Taxes on specific goods such as gasoline and alcoholic beverages are called a. excise laxes. b. payroll taxes. e sales taxes. d. social insurance taxes. 16. The concept that people should pay taxes based on the benefits they receive from government services is called a the ability-to-pay principle. b. the benefits principle. c. horizontal equity. d. vertical equity. 17. If Danielle sells 300 wrist bands for S0.50 each, her total revenues are a $150 .$299.50. c.$300 d. $600 18. Economists assume that the typical person who starts her own business does so with the intention of a donating the profits from her business to charity b. capturing the highest number of sales in her industry c maximizing profits d. minimizing costsExplanation / Answer
12> b
Free-riders enjoy the benefit of the goods without paying for it.
13> c
The socially optimum outcome may not be obtained when players play on their self-interest.
14> a
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.
15> a
Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline.
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