The above figure shows the isoquants for producing steel. ...

[jwb375]

The above figure shows the isoquants for producing steel. Constant returns to scale are
 
  A) present when producing less than 10,000 tons.
  B) present when producing between 10,000 and 20,000 tons.
  C) present when producing more than 20,000 tons.
  D) never present.

Question 2

Define the benefit principle. List two real world taxes that have the features of a tax based on the benefit principle. Why can't the benefit principle be the sole principle of taxation?
 
  What will be an ideal response?

[abctaiwan]

Answer to Question 1

B

Answer to Question 2

The benefit principle states that the people who benefit from the government's expenditures should be the ones who pay for them. Two real world examples of taxes that have features based on the benefit principle are entry fees for public parks and tolls for government turnpikes. The benefit principle is difficult to apply in all situations because it is often difficult to determine who is actually benefiting from a government activity and it is often in conflict with other goals such as redistribution.

[jwb375]

Thank you

[abctaiwan]

Happy to help you