Economics Chapter 4

When the government imposes a tax on a product, buyers will be most negatively impacted if:

the burden does not depend on who the government collects the tax from.

The relationship between the value and price of a stock suggests that:

A and B are true. a. the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price. b. it is the market's best guess regarding the expected value of the company's future profits.

A tax:

All of the above are true. is mandatory. is generally linked to some activity, such as a purchase. discourages the activity being taxed. All of the above are true.

Price controls:

can result in inequitable outcomes

The bulk of the nation's output is produced by:

corporations

Rent controls:

often help high-income families.

Governments often impose taxes because they want to discourage behaviors that officials believe is undesirable. This rationale for the tax is called:

paternalism.

In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was:

primarily due to technological change and an increase in the number of sellers.

Suppose an oil producer wants to ensure her business by lobbying her government to tax electric cars. This rationale for the tax—handicapping the business of one's competitors—is called:

rent seeking.

A firm owned by one individual is called a:

sole proprietorship.

Most firms in the United States today are

sole proprietorships and partnerships.

Governments often impose taxes because they need money to fund their operations. This rationale for the tax is called:

the revenue argument.