Which of the following statements is correct concerning the burden of a tax imposed on candles?
a. Sellers bear the entire burden of the tax.
b. We have to know whether it is the buyers or the sellers that are required to pay the tax to the government in order to make this determination.
c. Buyers bear the entire burden of the tax.
d. Buyers and sellers share the burden of the tax.
Answer: d. Buyers and sellers share the burden of the tax.
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Amalgamated Widget Company is currently considering which investment projects it should undertake. The following list of projects along with the estimated rate of return of each project is presented to the executive management team:Project A (9%)Project B (7.5%)Project C (6.5%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 6%. However, if an increase in government borrowing pushes the interest rate to 8%, we would expect the company to undertake ________ projects.
A. four B. five C. two D. three
The economic behavior of individual decision makers and the determination of price and output in specific markets are both studied in
a. microeconomics b. macroeconomics c. positive economics d. normative economics e. disequilibrium economics
Behavioral economists accept that people ___________ their well-being but sometimes ________________.
A. try to maximize; make mistakes B. try to minimize; maximize it C. try to maximize; maximize their bad choices D. try to maximize; purposefully engage in less than optimal behavior.
Suppose there is no uncertainty about sales. Firms can avoid hiring lazy workers by
A) offering contingent contracts. B) fixed wage contracts. C) engaging in cheap talk. D) All of the above.