Suppose the government changes the tax code so that it is much simpler-there are fewer rules, fewer deductions, and fewer calculations to perform. Describe, using a supply and demand diagram, what would happen in the market for tax accountants.
What will be an ideal response?
The labor demand curve for tax accountants would shift to the left, reducing the equilibrium wage for accountants and decreasing the equilibrium quantity.
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Compared to bondholders, stockholders
a. face higher risk and have the potential for higher returns. b. face higher risk but receive a fixed payment. c. face lower risk and have the potential for higher returns. d. face lower risk but receive a fixed payment.
If the long-run average cost curve is U-shaped, the optimal scale of production from society's viewpoint is
A) the minimum efficient scale. B) where maximum economic profit is earned by producers. C) where firm profit is large enough to finance research and development. D) one which guarantees economic profit.