Based on our discussion of public goods, one economic justification for compulsory taxation is thatSelected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.ait helps encourage citizens to have similar preferences.bthe government can help society reach a Nash Equilibrium.cthe government can act as a coordinating device: forcing everyone to "donate" to a public good by paying taxes helps mitigate the free rider problem.dthrough taxation, the government can redistribute a public good to citizens who desire it the most.

If government's goal is to alter people's behavior through taxation, then taxing goods with relatively elastic demand and supply would be most effective.

Explain the reasons why governments impose taxes and considerwhether an increase in income tax is fairer than an increase in salestaxes.

In addition to taxes, what other regulation could the government impose that would achieve the efficient outcome?Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.aThe government could provide subsidies.bThe government would have to mandate that there be no quantity produced greater than the allocatively efficient quantity.cImposing a tax is the only option available to the government.

The ability-to-pay principle provides a direct connection between taxes and the use of revenue.TrueFalse

“The government should reduce income taxes” – this statement is an example of positive economics.Question 28Select one:TrueFalse