Author Question: Suppose there is only one movie theatre in a town and the equilibrium price and quantity for movie ... (Read 29 times)

llesku · **on:** Oct 12, 2022

Question 1

Possible implications of corporate income taxes being levied on accounting profits include
1) underinvestment in new machinery and equipment;
2) a lower rate of adoption of the latest technologies;
3) faster productivity growth.
◦ 1 only
◦ 2 only
◦ 3 only
◦ 1 and 2
◦ 1 and 3

Question 2

Suppose there is only one movie theatre in a town and the equilibrium price and quantity for movie admissions is $9 and 850 visits per week. Now suppose the town government imposes a tax such that the new equilibrium price and quantity are $10.50 and 780 visits per week. What is the direct burden of this tax?
◦ $1275
◦ $0
◦ $1170
◦ $105
◦ There is not enough information to know.

bball_babe_123 · **Reply #1 on:** Oct 12, 2022

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