If the government increases the corporate income tax,
A) the user cost of capital declines and V* increases.
B) the user cost of capital declines and V* decreases.
C) the user cost of capital increases and V* decreases.
D) the user cost of capital increases and V* increases.
C
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The symmetry principle is the requirement that
A) people in similar situations be treated similarly. B) Society's income be distributed symmetrically among its members. C) the poorest 20 percent of households should receive the same total income as the richest 10 percent of households. D) the average person be made as well off as possible.
Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases?
a. Price and quantity will rise. b. Price will stay the same and quantity will rise. c. Price and quantity will fall. d. Price will fall and quantity will increase. e. Price will fall and quantity will stay the same.