Refer to Scenario 9.1 below to answer the question(s) that follow. SCENARIO 9.1: Amy borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen. Refer to Scenario 9.1. Amy's total fixed costs equal
A. $1,000.
B. $9,000.
C. $10,000.
D. $21,000.
Answer: C
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A. Is a regressive tax because poor individuals consume a higher percentage of their income than high-income individuals. B. Does not impose an additional tax burden on most individuals because the sales tax is paid entirely by the seller. C. Is a progressive tax because high-income individuals buy more goods and services than low-income individuals. D. Is a proportional tax because the rate is the same for all income groups.
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