BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

Solutions

Chapter
Section
BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

A toll is a tax on citizens who use toll roads. This policy can be viewed as an application of

a. the benefits principle.

b. horizontal equity.

c. vertical equity.

d. tax progressivity.

To determine
The application on which the policy of toll tax is based.

Explanation

Option (a):

According to the benefit principle, individuals should pay taxes based on the benefits they get from the government services. So, an individual who uses the toll road more will pay more according to the benefit principle. Hence, option ‘a’ is correct.

Option (b):

The notion of horizontal equity states that individuals with similar ability to pay taxes should pay the same amount. It does not talk about the extent of use of public goods like toll road, but talks about the ability to pay for a public good...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Explain the separate entity concept.

College Accounting (Book Only): A Career Approach

Explain why depreciation on an existing asset is always irrelevant.

Managerial Accounting: The Cornerstone of Business Decision-Making

OPTIMAL CAPITAL STRUCTURE Jackson. Trucking Company is in the process of setting its target capital structure. ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How does an employer file an amended Form 940?

PAYROLL ACCT.,2019 ED.(LL)-TEXT