-Refer to Exhibit 11-5 Which Summarizes the Situation Prior to the Value

question 158

Multiple Choice

-Refer to Exhibit 11-5 which summarizes the situation prior to the value added tax (VAT) .If the government imposes a VAT rate of 10 percent,the baker must pay ___________ in VAT tax and will need to raise the price he charges the final consumer to _______________.

• A) $0.06; $2.25
• B) $0.11; $2.75
• C) $0.25; $2.75
• D) $0.60; $2.57

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Outdoor Pets

Domestic animals such as dogs and cats that are suitable for living outside in a safe environment.

Leash Law

Regulations requiring pet owners to keep their pets on a leash in public areas to prevent accidents and ensure safety.

Public Sector

The part of the economy comprised of government services and enterprises, including infrastructure, public education, and healthcare.