Assume that both the corporate and noncorporate sectors are in long-run equilibrium before the imposition of a corporate profits tax. In the short run, the imposition of a corporate profits tax will
A. decrease profits in both the corporate and noncorporate sectors.
B. not change profits in the noncorporate sector, but decrease profits in the corporate sector.
C. not change profits in either the corporate or the noncorporate sector.
D. not change profits in the corporate sector, but increase profits in the noncorporate sector.
Answer: B
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Compare and contrast the effects of a tariff on prices and national well-being imposed in a small country with the effects of a tariff imposed in a large country. Illustrate your answer with the help of suitable diagrams.
What will be an ideal response?
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Refer to Table 2-20. What is Thailand's opportunity cost of producing one wristwatch?
A) 0.05 pounds of rice B) 20 pounds of rice C) 25 pounds of rice D) 60 pounds of rice