Which of the following taxes is most likely to be shifted?
A. A general sales tax.
B. A flat-rate state income tax.
C. A progressive federal income tax.
D. A property tax on an owner-occupied residence.
Answer: A
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Whenever there is a difference in the same exchange rate offered in two markets, an arbitrageur would:
a. wait for the markets to come to equilibrium. b. buy in the market where the currency is offered at the cheaper rate,and simultaneously sell the currency where the rates are higher. c. sell the cheaper-rate currency in the home market. d. not consider the trade, since prices would undoubtedly change before it could be executed.
Suppose a hurricane decreased the supply of oranges so that the price of oranges rose from $120 a ton to $180 a ton and quantity sold decreased from 800 tons to 240 tons. What is the absolute value of the price elasticity of demand?
A) 0.11 B) 0.37 C) 2.69 D) 9.33