If Managers of a Private Corporation Perform Poorly, Each Owner

question 108

Multiple Choice

If managers of a private corporation perform poorly, each owner has the option of

• A)closing down the firm
• B)selling her share of the firm
• C)managing the firm herself
• D)paying no taxes on the little profit she does receive
• E)selling off the plant and equipment of the firm

Understand the concept of deadweight loss and how taxes contribute to it.

Analyze the impact of taxes on market size and participant behavior.

Understand the difference in the economic effects of taxes imposed on buyers versus sellers.

Learn the relationship between elasticity of demand/supply and the deadweight loss from taxation.

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Definitions:

Population Proportion

The fraction of members in a statistical population that meet a specified characteristic or criteria, often estimated using sample data.

Defective Items

Products that fail to meet quality standards or specifications and are therefore unsuitable for sale or use.

Estimating P

This refers to the process of determining the probability of success in a given Bernoulli trial or binomial experiment.

Data

Information collected together for reference or analysis, usually in numerical or categorical form.