The higher is the tax on productive activity, the more likely that people will attempt to evade those taxes by diverting their economic activity from the formal, reported economy to an underground, "off-the-books" economy

It is not true of profits that they

A. are what remains from the selling price after factors have been paid. B. accrue to entrepreneurs. C. account for a relatively small portion of national income. D. account for about as much national income as wages and salaries.

What is the equilibrium price and quantity of CFC-11 before the excise tax?

Consider the following market for CFC-11, a known ozone-depleting substance: Demand: Q= 20 – 1.5P Supply: Q= 5+0.5P whereP is price per pound. Assume the governmental authority imposes a $5 per pound excise tax on CFC-11, which shifts the supply function to Q’ = 2.5 +0.5P.Use this information for any or all of the next three questions below. a. P = $8.75; Q = 5 c. P = $6.875; Q = 8.75 b. P = $7.5; Q = 8.75 d. none of the above