The mayor of Workerville proposes a local payroll tax to fund a new water park for the city. The mayor proposes to collect half the tax from workers and half the tax from firms. Workers will bear
a. an equal share of the tax in comparison to firms.
b. a greater share of the tax in comparison to firms.
c. a smaller share of the tax in comparison to firms.
d. All of the above are possible.
d
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Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a sole proprietorship. What is one disadvantage to Jeremy of setting up his business as a sole proprietorship?
A) As a sole proprietor, Jeremy would face unlimited liability. B) As a sole proprietor, Jeremy would be subject to significant rules and regulations. C) As a sole proprietor, Jeremy would be taxed twice. D) As a sole proprietor, Jeremy would not have control of the business.
For this question, assume that firms experience an increase in sales. We would expect that this increase in sales will cause
A) an increase in profit per unit of capital. B) a decrease in profit per unit of capital. C) no change in profit per unit of capital. D) ambiguous effects on profit per unit of capital. E) none of the above