Sidewinder, Inc., has sales of $634,000, costs of $328,000, depreciation expense of $73,000, interest expense of $38,000, and a
tax rate of 21 percent. What is the net income for this firm? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
The correct answer is letter "B": reduce productivity. Other things the same, this decrease will be larger in a poor country.
Explanation:
Labor productivity measures the units a worker can produce per hour. <em>Capital, technology, </em>and <em>human development</em> influence the labor productivity employees could have. Poor countries are characterized by having low investments. If the labor force increases but the capital remains stagnant, the level of productivity is likely to fall since there is a surplus in labor hand.
Deadweight loss refers to an economic loss caused by market inefficiencies.
Market inefficiencies occur when supply and demand are not in equilibrium. In market A, the tax will barely affect the equilibrium quantity, so the deadweight loss will not be as large as in market B where the equilibrium quantity will be severely affected.
