Suppose the capital gains tax is 28 percent and you purchased a house ten years ago for $80,000. If you sold the house today you would get $140,000. Your tax liability would be
A) $39,200.
B) $16,800.
C) indeterminate without knowing the inflation rate.
D) indeterminate without knowing the personal income tax rate.
B
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What will be an ideal response?
"I'd rather have $100 now than wait for $100 six months from now." This person
A) displays a negative rate of time preference. B) displays a positive rate of time preference. C) displays a zero rate of time preference. D) displays irrational behavior because the money will be more valuable later.
The above figure shows the demand and cost curves for a firm in monopolistic competition. In the long run, the demand for this firm's product will
A) decrease as other firms enter the industry. B) decrease as product differences disappear. C) become less elastic as firms exit the industry. D) become less elastic as other firms enter the industry.
If the marginal physical product of labor increases with the addition of new workers, it's because
a. labor specialization raises labor productivity b. the new workers are hired at lower wage rates c. the law of diminishing returns applies to new workers d. the supply curve of labor is upward sloping e. of the low productivity of capital