1.The difference between a value-added tax and a flat tax is

a. a value-added tax is progressive, while a flat tax is proportional.

b. value-added tax is vertically equitable, while a flat tax is horizontally equitable

.c. a value-added tax satisfies the ability-to-pay principle, while a flat tax satisfies the benefits principle

.d. There is essentially no difference between a value-added tax and a flat tax.

2.Which of the following is not a public good?

a. national defense

b. patented technological knowledge

c. general knowledge

d. the elimination of poverty

3.Vertical equity and horizontal equity are associated with

a. the benefits principle of taxation.

b. the ability-to-pay principle of taxation.

c. taxes that have no deadweight losses

.d. falling marginal tax rates.

4.Trade raises the economic well-being of a nation in the sense that

a. the gains of the winners exceed the losses of the losers.

b. everyone in an economy gains from trade.

c. since countries can choose what products to trade, they will pick those products that are most beneficial to society.

d. the nation joins the international community when it begins to engage in trade.