Author Question: The inefficiency for collective consumption goods stems from the fact that _____. a. the total ... (Read 64 times)

fnuegbu · **on:** Jul 1, 2018

The inefficiency for collective consumption goods stems from the fact that _____.

a. the total cost of the good is too high
b. the marginal cost of the good is zero
c. the total cost of the good is zero
d. the good cannot be priced because it is too easy to steal

Question 2

Is it proper to say corporations pay taxes? Why or why not? How does the allocation of the corporate income tax burden change from the short to the long run?

What will be an ideal response?

Jayson · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

b

Answer to Question 2

No, strictly speaking, it is not proper to say that corporations pay the corporate income tax. The corporate income tax is ultimately borne by individuals, either the corporation's stockholders, customers, or employees. In the short run, capital is assumed to be fixed so the stockholder's will be unable to shift much of the burden onto the firm's customers. In the long run capital is more mobile, and so the owners of the firms will be able to shift most of the corporate tax burden onto its customers or employees.