Scarcity implies that people must

Although water is very abundant in most places, it is scarce because:

A) it has no alternative uses. B) it has two or more alternative uses. C) it is a free good and not expensive. D) scarce goods in general are not all that costly.

If the government increases the corporate income tax,

A) the user cost of capital declines and V* increases. B) the user cost of capital declines and V* decreases. C) the user cost of capital increases and V* decreases. D) the user cost of capital increases and V* increases.