The Lerner Index is derived from the profit-maximizing condition of a firm

Before its IPO, Facebook was an example of a private firm. As a private firm, Facebook was

A) not subject to government regulations and taxation. B) not legally allowed to raise funds through venture capital firms. C) run by stockholders and a board of directors. D) run by its founder, Mark Zuckerberg.

In a country with unusually high tax rates, one might expect that ________

A) GDP might be overstated because the government might avoid running surpluses B) GDP might be understated because its citizens might avoid reporting some of their income C) GDP might be overstated because the government might raise its outlays D) GDP might be understated because its citizens might flee the country E) after tax income should be much higher than that of countries with lower tax rates