Economics 26855

The top 10% of income earners pay ____ of federal income taxes.
A) 10%
B) 53%
C) 65%
D) 93%

Refer to Table 4.2, Box C should be filled with

A) $0.
B) $5
C) $1
D) $2

Under the George W. Bush Administration, federal income taxes were cut twice and boosted defense spending substantially. Taken together these actions are likely to have
A) increased aggregate demand.
B) increased aggregate supply.
C) decreased aggregate demand.
D) decreased aggregate supply.

The residential electricity market is characterized by
A) unregulated simple monopoly.
B) unregulated natural monopoly.
C) regulated (usually natural) monopoly.
D) unregulated perfect competition.

Among countries with per capita gross national income in 2006 less than $2,000,
A) the Gini coefficient of income inequality tends to be lower.
B) the consumer price inflation rate tends to be lower.
C) agriculture tends to produce a larger share of GDP.
D) high-income households tend to consume a smaller share of GDP.

If a household has a single woman and three kids, has a standard deduction of $5,950, its itemized deductions are $10,650 and personal exemptions of $11,400 (3*$3,800) then the first _____ of income is federal income tax free.
A) $16,600
B) $17,350
C) $22,050
D) $28,000

In 2014, the largest item in the Federal Budget was
A) national defense & homeland security.
B) interest on the national debt.
C) welfare.
D) international aid.

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, “underemployment” would be illustrated by
A) 125 million losing their jobs.
B) 8 million ending their search for work.
C) part of the 125 million holding low-skill jobs when they were qualified for only low-skill jobs.
D) part of the 125 million holding low-skill jobs when they were qualified for high-skill jobs.

If an investment (where the costs are incurred before then profits) makes sense when the interest rate on the borrowed money to pay for it is 10%
A) an increase in the interest rate will cause the investment to lose money.
B) an increase in the interest rate will cause the investment to be less profitable, but it still may make money.
C) a decrease in the interest rate will cause the investment to lose money.
D) a decrease in the interest rate will cause the investment to be less profitable, but it still may make money.

The real balances effect suggests that
A) when prices are higher your buying power is less so you buy less.
B) when prices are higher you buy less of what you originally wanted and use something else instead.
C) when prices are higher buy fewer because the marginal utility of a good is diminishing.
D) when prices are higher you buy more.

Written and recorded works, ideas, formulas and other creative intangible property that are owned by an individual or a group of individuals are examples of the economic concept of
A) physical capital.
B) public property.
C) intellectual property.
D) personal effects.

Requiring new 16 year old teenage male drivers to pay more for auto insurance than their 16 year old female counterparts is an example of
A) statistical discrimination.
B) disparate treatment discrimination.
C) comprehensive discrimination.
D) adverse impact discrimination.

If a person has a deductible of $300 and must pay $500 out of a $1,300 health care expense in a year, then their co-payment rate is
A) 5%.
B) 10%.
C) 20%.
D) 50%.

Between 2004 and 2005 the Federal Reserve raised interest rates 11 times. This is an example of
A) discretionary fiscal policy.
B) nondiscretionary fiscal policy.
C) expansionary monetary policy.
D) contractionary monetary policy.

The royalty that an author receives on the resale of a used college textbook is
A) typically 15%.
B) half the typical new sale rate, or 7.5%.
C) set at 2%.
D) zero.

In 2003, the Federal Reserve had used its control over the federal funds rate to such a degree that
A) the federal funds rate was the highest it had been in 15 years.
B) the federal funds rate was driven below zero.
C) the federal funds rate was the lowest it had been in 15 years.
D) Congress stripped the Federal Reserve of this authority.

If the deductible is $200 and the co-payment is 20%, on a covered expense of $1200 the individual will pay _____ and their insurance company will pay ______.
A) $400;$800
B) $200; $1000
C) $800; $400
D) $600; $600

One of the reasons that Real Gross Domestic Product is not synonymous with social welfare is
A) people substitute between goods.
B) things produced by people under 18 are not counted.
C) environmental quality is ignored.
D) quality has remained steady.

Publicly provided health insurance for the poor will
A) raise the price of health care to the non-poor.
B) raise the level of health care consumed by the non-poor.
C) decrease the total amount of health care consumed.
D) raise the price of health care to the non-poor and decrease the total amount of health care consumed.

When estimating GDP using the income approach, aggregate income is adjusted by
A) adding depreciation.
B) adding net income earned abroad.
C) subtracting indirect business taxes.
D) subtracting depreciation.

If the poverty line is set too low, the official poverty rate will be
A) lower than the true level.
B) unaffected by this problem.
C) higher than the true level.
D) negative

School voucher programs
A) are universally hailed by teachers unions.
B) have not been tried in the United States.
C) have had modest success in some experimental locations.
D) have had students perform much worse than equally-situated students in public schools.

A decrease in supply will always
A) increase producer surplus.
B) decrease consumer surplus.
C) decrease producer surplus.
D) increase consumer surplus.

The minimum wage has never been sufficient to get a family of ____ above the poverty line.
A) one
B) two, three or four
C) three or four
D) four

We spend ____ on in-kind transfers and ____ on in-cash transfers to help the poor per year.
A) $100 billion, $91 billion
B) $551 billion, $134 billion
C) $910 billion, $381 billion
D) $1,400 billion, $391 billion

Normal Profit is what a firm
A) usually makes.
B) needs to make to maintain the incentive to remain in the industry.
C) is zero in the long run.
D) a) and b)

In Figure 22.1 for a good with no externality, which area represents the net benefit to society of this market?

A) 0ACQ*
B) ABC
C) BP*C
D) 0P*CQ*

One of the key income tax topics debated during the 2010 mid-term elections was whether the
A) 2003 tax cuts should be allowed to expire in 2011.
B) 1986 tax increases should be finally repealed in 2011.
C) national sales tax should be abolished and replaced with a single income tax rate of 21%.
D) Iraqi oil revenues should be taxed by the U.S. to provide care for disabled Iraqi War veterans.

Among the very real problems of tobacco, alcohol and illegal goods and services are
A) added tax receipts.
B) external costs.
C) external benefits.
D) salutary effects upon spouses and children.

The positive externality argument in favor of a city seeking a professional sports franchise is
A) the jobs created in the area will make it worth the investment.
B) there are people in the city that will be happier when the team is in the city and they will be the one who buy tickets.
C) there are people in the city that will be happier when the team is in the city even if they do not buy tickets.
D) that the benefits occur at a different time as the costs.

Of the collection of supply and demand diagrams in Figure 2.2 which one shows the result of an increase in the taste for a good?

A) Figure 1
B) Figure 2
C) Figure 3
D) Figure 4

When an insurance company pays 20% of the bill for health care services, this
A) increases supply.
B) reduces demand.
C) makes demand less elastic.
D) reduces demand and makes demand less elastic.