When does the burden of a tax imposed on a good fall more heavily on sellers?
What will be an ideal response?
The tax burden falls more heavily on sellers if the supply curve is less elastic than the demand curve. This is because if supply is less elastic than demand, the fall in supply due to the imposition of the tax will be less than the fall in demand due to the tax.
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Assume you pay a premium of $0.80/bu for a soybean call option with a strike price of $9.00/bu and that the current futures price is $9.30/bu. What is the option's current intrinsic value?
A. $0.20/bu B. $0.30/bu C. $0.50/bu D. $0.80/bu
In the 1980s, Howard was one of the best car phone repairmen in his area. After staying home in the 1990s and early 2000s to take care of his children, Howard wants to go back to work in the phone repair business. Which of the following can be said about Howard?
A. Because car phones are obsolete, Howard's human capital is less valuable. B. Howard's knowledge of how to repair car phones is obsolete, and his human capital is less valuable now than in 1980. C. Howard's ability to repair car phones represents an obsolete skill. D. All of these could be said about Howard.