When traveling on vacation in a country with a large consumption tax, you are presented with a

Question:

When traveling on vacation in a country with a large consumption tax, you are presented with a deal: pay cash and get a 10% discount. Given that credit card transactions cost the merchant less than 2%, why did the merchant make this offer?

Would the merchant be more or less likely to make the offer if the country had a value-added tax instead? Explain.

The indicates a question that requires students to apply the empirical economics principles and the Empirical Evidence boxes.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For answer-question

Public Finance And Public Policy

ISBN: 9781319105259

6th Edition

Authors: Jonathan Gruber

See More Books

Question Posted: Mar 17, 2024 06:00 AM

See More Questions

When traveling on vacation recently in a country with a large consumption tax, I was presented with a deal: pay cash and get a 10% discount. Given that credit card transactions cost the merchant less...
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
Ann Carter, Chief Financial Officer of Consolidated Electric Company (Con El), must make a recommendation to Con Els board of directors regarding the firms dividend policy. Con El owns two...
1. Enis falsely accuses Monalisa of stealing from Island Tours, Inc., their employer. Enis's statement is defamatory only if a. a third party hears it. b. Monalisa has not been caught. c. the...
For each of the following situations, what amount would the insurance company pay? a. Wind damage of $785; the insured has $500 deductible. b. Theft of a stereo system worth $1,300; the insured has a...
Analysis of a capillary flow meter (see Fig. 2B.8). Determine the rate of flow (in lb/hr) through the capillary flow meter shown in the figure. The fluid flowing in the inclined tube is water at 20 o...
The following data are for Marvin Department Store. The account balances (in thousands) are for 2017. 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold. 2. Prepare the income...
Abigail Trenkamp owns and operates the Trenkamp Collection Agency. Listed on the following page are the name, number of allowances claimed, marital status, information from time cards on hours worked...
In a random walk suppose that at t = (n - 1)At the particle is located at x = max. The assumption is that at t = nAt the particle will have moved to x = (m+1)Ax with probability 3/4 or to x = (m-3)Ax...
Enumerate the sources of several limitations to accounting data.
Istalia currently provides a tax credit for families who send their children to college. Faced with dire financial straits, Istalia has decided to eliminate this tax credit but to continue to extend...
Explain how a competitive firm selects the amount of labor it employs. Assume that the labor market is also competitive.
Research strategies salespeople, politicians and others use to make a favorable impression. Is it ethical to alter non-verbal messages to get you to like them, vote for them, or buy their products?...
Project I For this project you are to plan three (3) music/movement experiences, one for each of the following age groups: Under 3 year olds 3-5 year olds 6-8 year olds (be creative - the children...
Describe the correct procedures for responding to the following common customer complaints. incorrect pricing or quotes delays or errors in providing products or services misunderstanding of customer...
a) A dissertation is a common requirement for completion of most postgraduate studies. Most dissertations rely on the collection of primary data. As a research methods expert, discuss any three...
2. Who is the narrator of the story and how does the narrative voice influence our perception of Colonel du Preez? 3. Discuss the relationship between Colonel du Preez and Jake Mpahlele. Are they...
A car maintains a constant speed v as it traverses the hill and valley shown if Fig. 5-45. Both the hill and valley have radius of curvature R. (a) How do the normal forces acting on the car at A, B...
The 2017 financial statements of the U.S. government are available at: https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/fr_index.htm Use these to answer the following questions: a. Statement...
To determine the right amount of public good to provide, the government of West Essex decides to survey its residents about how much they value the good. It will then finance the public good...
Why is it difficult to empirically determine the degree to which government spending crowds out private provision of public goods?
Think back to Chapter 5. Why can the public good provision problem be thought of as an externality problem?
Assume that the spot-rate curve is flat at 6%. Consider a portfolio consisting of two par-coupon bonds. (Recall that if the spot-rate curve is flat, then the par-coupon yield curve is also flat at...
= Assume that the price S of a risky asset follows a binomial model with S(0) = $100, u = 10% and d -10%. The asset pays a dividend of $5 on the odd times, i.e., 1, 3, 5.... In this market, the...
Today, you borrow a sum of 10 000 euros. You will repay as follows 3,000 in 6 months 4 000 euros in 2 years ' 2,000 in 2 years and 3 months The balance in 3 years Knowing that the annual effective...

When traveling on vacation in a country with a large consumption tax, you are presented with a

Question:

Step by Step Answer:

Public Finance And Public Policy

Students also viewed these Business questions