Refer to Figure 2-8. If Vidalia chooses to produce 50 dozen ...

[ARLKQ]

Refer to Figure 2-8. If Vidalia chooses to produce 50 dozen roses, how many orchids can it produce to maximize production?
 
  A) 20 dozen orchids B) 40 dozen orchids C) 60 dozen orchids D) 80 dozen orchids

Question 2

Assume that instead of having a federal income tax, the federal taxes are levied as a consumption tax based upon a flat rate of 10 percent of all that you consume.
 
  How would this tax be different from an income tax? Would you expect this tax to be progressive, proportional, or regressive? What do you think would happen to the amount that people save under such a tax scheme? Explain your answers.

[kaykay69]

Answer to Question 1

C

Answer to Question 2

Saving would no longer be taxed as it is now. The tax would likely be more regressive than the current system because higher income households generally save more. Saving should increase because it is relatively subsidized by not being taxed.

[ARLKQ]

TYSM

[nyrave]

Gracias!