List four costs of taxation (above the tax itself) and provide a description of each
What will be an ideal response?
One cost of taxation is the welfare cost of taxation, which occurs because individuals take actions to avoid a tax. Another cost of taxation is compliance costs of taxation, such as the time and effort filling out tax forms or keeping records for tax keeping purposes. A third cost of taxation is administrative costs, which are the costs borne by the government to collect taxes, such as the cost of operating the Internal Revenue Service. A fourth cost of taxation is the political costs of taxation. The political costs of taxation incur when taxpayers attempt to influence tax laws by hiring lobbyists, writing their legislators, etc.
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Costs to the firm arising from reaching agreements on input prices with suppliers and then ensuring that terms of agreements are fulfilled, are called
A) negotiation costs. B) agency costs. C) transactions costs. D) implicit costs.
How is a long-run average cost curve different from a short-run average cost curve? How are they related?
What will be an ideal response?