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Mr. Bond who owns Spectre Road Construction Co. and runs it as a proprietorship, had a before-tax income last year of $140,000. His personal and family expenses are $50,000 and he has $10,000 in exemptions and deductions. If he paid himself a salary of $60,000 taxed at 22%, would it be advantageous for him to incorporate as a C-corporation (i.e., not a Chapter S Election), in terms of taxes paid. Explain your calculations. (Note: Consider Corporate Tax Rate = 35%)
Explain how did the early classical economists view the relation between productions also consumption.
Suppose that you are interested in studying the effect parental involvement has on children’s grades. You plan to measure parental involvement by asking the students a few survey questions. If you estimate your model using OLS, do you believe that an..
What is the short-run condition for the monopolist. In the following table are demand and cost data for a pure monopolist. What output will the monopolist produce? What total profit ill the monopolist receive at the profit-maximizing level of output?
Graphs are important, and not just for economics. They convey, relay, interpret, visualize, support and contradict, explain and explain away many of the things we come across in our daily lives both personally and professionally. Explain to us what e..
What are the three categories of transactions in the balance of payments? Give an example of each. Economists sometimes say that the current exchange rate system is a dirty float system. What does this mean? What are the main arguments presented aga..
If there is initially a federal budget surplus, and government purchases and transfer payments both fall:
According to Coase's theory of the firm, why do firms exist? How do firms contribute to the efficiency of the market economy in ways that 'networks of independent contractors' do not? How are the boundaries of the firm best established?
Since the 1970s, we have seen a shift in management’s attitude and approach toward unions. For this discussion, we will examine why this shift occurred and its implications for the future. What factors are important in understanding a company’s attit..
Alice runs a cupcake business. She uses lots of caster sugar in her baking (a very fine sugar). Alice also owns a thermomix, thus regular white sugar is a perfect substitute for caster sugar. However, regular sugar comes in 2kg bags, while caster sug..
Consider an economy with its production possibilities represented by the function Y = A √ K √ L where Y represents total output (i.e GDP), K is capital, L is labor, and A is total factor productivity (TFP). This economy devotes a share of 30% of its ..
Imagine you are a member of Congress. Since consumer spending comprises at least 2/3 of real GDP, you know that increasing that spending would boost the U.S. economy in the short run. During a press conference, a member of the press asks you what you..
How to design an experiment to test the theory that changing the oil of the new backhoes and forklifts will reduce repairs.
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