What is meant by the term double taxation?
a. The tax on corporations is double the rate paid by other forms of business.
b. The tax on corporations is one-half the rate paid by other forms of business.
c. Corporations must pay both federal and state taxes.
d. Corporate profits are taxed, and that portion of profits distributed as dividends is taxed as personal income
e. The corporation pays taxes on stocks and bonds.
D
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If one fails to account for implicit costs in decision making, then applying the cost-benefit rule will be flawed because:
A. the benefits will be overstated. B. the benefits will be understated. C. the costs will be overstated. D. the costs will be understated.
If the demand for one good decreases when the price of another good increases, the two goods are ________ goods.
A. normal B. inferior C. complementary D. substitute
The concept of an open economy means that
A. a nation's borders are open to flows of imports and exports. B. imports should be limited while exports should be expanded. C. imports and exports should be restricted. D. exports should be controlled but imports should be allowed in without restriction.
Sarah's demand curve for shoes has the same slope as Pete's; however, it lies to the right of Pete's. An increase in the price of shoes will cause
A) Sarah to incur a greater loss of consumer surplus than Pete will. B) Pete to incur a greater loss of consumer surplus than Sarah will. C) Sarah and Pete to incur the same loss of consumer surplus. D) Sarah's demand curve to shift closer to Pete's.