1. Potential mobility of the tax base is an important issue in state-local taxation and international taxation. Explain how this may impact decision-making in regard to tax policy.
2. Consider a market with demand and supply functions explained by: Qd = 500-3P and Qs = 4P + 50. If a price ceiling of 50 were imposed on this good, what would be the resulting shortage?
3. What are the important differences between relationships characterized by asymmetric information and those characterized by incomplete information?