Which of the Following Is Not a Way That a Corporate

question 317

Multiple Choice

Which of the following is not a way that a corporate tax on the income of U.S. car companies will affect markets?

• A)The price of cars will rise.
• B)The wages of auto workers will fall.
• C)Owners of car companies (stockholders) will receive less profit.
• D)Less deadweight loss will occur since corporations are entities and not people who respond to incentives.

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Definitions:

Contribution Format

A method of income statement preparation that separates fixed costs from variable costs.

Traditional Format

A conventional method of presenting financial statements or information, typically focusing on separating costs into fixed and variable categories.

Variable Selling Expense

Expenses that vary with sales volume, including commissions and shipping charges.

Fixed Selling Expense

Costs associated with selling which remain constant regardless of the level of sales.