Author Question: Which of the following is an argument that the incidence of corporate taxation falls entirely on ... (Read 31 times)

V@ndy87 · **on:** Jun 29, 2018

Which of the following is an argument that the incidence of corporate taxation falls entirely on consumers?

A) Corporations pass their tax burdens on to consumers by charging higher prices equal to the amount of the tax.
B) Corporations pass their tax burdens on to consumers because consumers ultimately work for the corporations.
C) Corporations always evade taxes so that consumers ultimately bear the tax burdens as taxpayers.
D) Most taxes on consumers are collected by corporations through sales taxes.

Question 2

What assumption about human motivation is made in economics? Explain.

What will be an ideal response?

katkat_flores · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A

Answer to Question 2

Economists assume that people act as if motivated by self-interest. People respond predictably to opportunities for gain. That is, people look out for their own self-interest and do so in a rational manner.