The above figure shows the market for buckets of golf balls at the driving range. A new leisure time tax is placed on suppliers in this market, shifting the supply curve from S0 to S1. The tax incidence is
A) split equally between buyers and sellers, each paying $1 per bucket.
B) split equally between buyers and sellers, each paying $2 per bucket.
C) such that buyers pay $2 per bucket and sellers pay $1 per bucket.
D) such that buyers pay $1 per bucket and sellers pay $2 per bucket.
E) such that sellers pay all of the tax.
D
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Government can overcome the free rider problem by taxing individuals and then using the tax proceeds to provide the nonexcludable public good itself.
Answer the following statement true (T) or false (F)
The school of economic thought which argues that through tax reductions, and deregulation, government creates the proper incentives for the private sector to increase aggregate supply is known as the:
a. rational expectations school. b. neo-Keynesian school. c. supply-side school. d. new classical school. e. classical school.
Explain how derivates were used to increase risk making the financial crisis of 2007-2009 more severe
The main advantage of a corporate form of organization is that
A. shareholders have unlimited liability. B. all corporate profits must be distributed as dividends. C. shareholders have limited liability. D. shareholders are not subject to double taxation.