You hear a candidate for the U.S. Congress state that a tax on stocks is an equitable way for the government to raise revenue because it only affects the very wealthy. Evaluate this statement
Although the very wealthy do hold most of the shares of stock, and so would be hit harder by the tax than
the poorer segment of the population, it is inaccurate to say that such a tax would only affect the very
wealthy. Approximately 26 percent of Americans directly owned stocks in 1992, including people in all
income brackets. Additionally, many more people own stock indirectly through pension plans, life
insurance policies, and other financial intermediaries.
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The above figure shows a payoff matrix for two firms, A and B, that must choose between selling basic computers or advanced computers. Firm B's dominant strategy
A) is to make basic computers. B) is to make advanced computers. C) is to adopt firm A's strategy. D) does not exist in this game.
Usually, the shape of a firm's total variable cost curve primarily reflects the cost of
a. labor b. taxes c. energy d. depreciation e. raw materials