Consider a public good such as fire protection services. Rich people may benefit more than the poor from such a service because rich people stand to lose more from a fire that destroys property. In this case
A) the benefits-received principle may support the rich paying more taxes than the poor, but not the ability-to-pay principle.
B) the ability-to-pay principle may support the rich paying more taxes than the poor, but not the benefits-received principle.
C) neither the benefits-received nor the ability-to-pay principles may support the rich paying more taxes than the poor.
D) both the benefits-received and the ability-to-pay principles may support the rich paying more taxes than the poor.
Question 2
Refer to Figure 16-3. Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?
A) the customers from The Chateaumarket A
B) There is no difference in the elasticity of demand between the two groups.
C) There is insufficient information to answer this question.
D) the other residents of the neighborhoodmarket B
Faith Ringgold, God Bless America, No. 13 from the series American People.
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