Assume That Both the Corporate and Noncorporate Sectors Are in Long-Run

question 148

Multiple Choice

Assume that both the corporate and noncorporate sectors are in long-run equilibrium before the imposition of a corporate profits tax. In the short run, the imposition of a corporate profits tax will

• A) decrease profits in both the corporate and noncorporate sectors.
• B) not change profits in either the corporate or the noncorporate sector.
• C) not change profits in the noncorporate sector, but decrease profits in the corporate sector.
• D) not change profits in the corporate sector, but increase profits in the noncorporate sector.

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Definitions:

Gardenburger

A brand known for its vegetarian burgers and meatless products, catering to those seeking vegetarian options.

Budget Constraint

The limitations on the consumption choices of an individual or family based on their income and the prices of goods and services.

Hamburgers

A popular food item typically consisting of a cooked patty of ground meat placed inside a sliced bun.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.