The actual division of the burden of a tax between buyers and sellers in a market is called
A) tax parity. B) tax incidence. C) tax bearer. D) tax liability.
B
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Who among the following faced an opportunity cost?
A) The fiancée B) The recently married bride C) The cheating spouse D) The divorcee E) All of the above.
A ____ rate of total savings will lead to a _____ rate of capital formation.
A. low; high B. low; low C. high; low D. the rate of savings does not affect the rate of capital formation.
An increase in productivity as a result of a new technology would cause the production possibilities frontier to:
A. not move until society chooses to move it. B. shift out. C. become more meaningful in policy decisions. D. shift in.
Use the following example to review the basic incentive problem in the owner/ employee conflict. Assume perfect contracting possibilities. Chef Tom Malone is the key employee for FancyFoods. His utility is defined by U = I ? e2 and his reservation wage is $2,000 per week. FancyFoods costs = Malone's wages = $2,000 + e2 FancyFoods benefits = revenue = 300e Profits = Revenues ? Costs Compute the optimal wage bill for Chef Malone, the revenues for FancyFoods, and the profits earned by FancyFoods.
What will be an ideal response?