Discuss probable incidence of a local tax on business property
What will be an ideal response?
A local tax on business property could be shifted to the tenant if the landlord is someone other than the business owner. The business, whether tenant or property owner, could shift some of the property tax to customers in the form of higher prices. The degree to which the tax could be shifted would depend on the impact the tax had on the firm’s product prices. If demand for the firm’s product was very elastic, then the firm would be unable to raise prices by the full amount of the tax, and the firm would bear the burden of the tax in the form of reduced profits. If demand for the firm’s product was inelastic and the tax did not raise prices significantly, then the firm could pass on the cost of the property tax to its customers.
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The infant industry argument is that:
a. those industries that produce products for infants should be protected. b. developing industries should be allowed to face foreign competition. c. protectionism should be used to create a level playing field for the domestic firms to compete with foreign firms. d. protectionism promotes complete specialization in the country on the basis of comparative advantage. e. new industries should be protected from foreign competition until they have had adequate time to develop.
The three most important sources of economic growth are
a. increases in employment, protection of resources, and changes in technology b. decreases in employment, decreases in the money supply, and improvements in technology c. increases in employment, increases in the capital stock, and reductions in environmental pollution d. increases in employment, increases in the capital stock, and improvements in technology e. increases in employment, decreases in the money supply, and increases in capital stock