How much income is left over for the shareholders of acme
Course:- International Economics
Reference No.:- EM13233723

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For each car that Acme U.S. sells, this table summarizes the information on the revenue and costs for the three firms. It shows the initial price that Acme U.S. pays Acme Mexico, $3,000 per engine. In some problems, you will be asked to consider how things change if it increases this price to $3,500 per engine.

Revenue: $500
Payment to Workers:
Purchased Inputs: $0

Acme US
Revenue: $15000
Payment to Workers: $10500
Purchased Inputs:
Engines $3000
Elecricity $500

Acme Mexico
Revenue: $3000
Payments to Workers: $2200
Purchased Inputs: $0

Suppose that the U.S. government collects a 35% tax on all corporate profit earned in the United States and that the Mexican government collects a 20% tax on all corporate profit earned in Mexico.

After Acme U.S. and Acme Mexico pay taxes in their respective countries, how much income is left over for the shareholders of Acme Worldwide on each car that Acme U.S. manufactures and sells?

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