Which of the following is not part of the “taxes” provision of the Patient Protection and
Affordable Care Act (ACA)?
A) Pharmaceutical firms and health insurance firms will pay new taxes.
B) Investors earning more than $200,000 will pay a new tax on their investment
income.
C) Beginning in 2018, all taxes on employer-provided health insurance plans will be
reduced or eliminated.
D) Workers earning more than $200,000 will have their share of the Medicare payroll
tax increase.
The marginal productivity theory of income states that a person’s total income is
determined by
A) the amount and productivity of factors of production the individual owns.
B) how much the individual works.
C) how profitable the firm the individual works for is.
D) how much the individual has inherited.
A financial security that represents a promise to repay a fixed amount of funds is a
A) share of stock.
B) coupon.
C) dividend.
D) bond.
Which of the following would be considered an implicit cost of operating a business?
A) advertising expenses
B) wages paid to workers
C) a normal rate of return for investors
D) any explicit cost
If the marginal propensity to consume is 0.6, the marginal propensity to save is
A) 0.4.
B) 0.6.
C) 1.
D) 1.5.
For-profit producers will produce only private goods because
A) markets exist for private goods but not for public goods.
B) the cost of production can be easily determined.
C) buyers will be willing to pay for the goods since the benefits are excludable.
D) all external benefits can be internalized using market prices.
Which of the following statements is true about competition in a market?
A) Competition forces firms to outsource the production of their labor-intensive
products.
B) Competition forces firms to undercut their selling price, thus benefiting consumers
who will be able to purchase products at the lowest price possible.
C) Competition forces firms to produce and sell products as long as the marginal benefit
to consumers exceeds the marginal cost of production.
D) Competition forces firms to add only low profit margins to their costs of production.
Since 1999, the U.S. ________ account has recorded relatively minor transactions, such
as migrants’ transfers, and sales and purchases of nonproduced, nonfinancial assets.
A) current
B) capital
C) financial
D) balance of trade account
Figure 2-9 Figure 2-9
shows the production possibilities frontiers for Greenland and Iceland. Each country
produces two goods, snow cones and popsicles. What is the opportunity cost of
producing 1 snow cone in Iceland?
A) 2/3 of a popsicle
B) 3/4 of a popsicle
C) 1 1/2 popsicles
D) 180 popsicles
Figure 28-6
If firms and workers have rational expectations, an expansionary monetary policy will
cause the short-run equilibrium to move from
A) point B to point C.
B) point C to point A.
C) point A to point B.
D) point B to point A.
E) point A to point C.
A newspaper story on the effect of higher milk prices on the market for ice cream
contained
the following:
“As a result [of the increase in milk prices], retail prices for ice cream are up 4 percent
from last year. . . . And ice cream consumption is down 3 percent.”
Source: John Curran, “Ice Cream, They Scream: Milk Fat Costs Drive Up Ice Cream
Prices,” Associated Press, July 23, 2001.
Based on the information given, what is the price elasticity of demand for ice cream?
A) 0.75 (in absolute value)
B) 1.33 (in absolute value)
C) 12%
D) We do not have enough information to calculate the elasticity.
Most economists believe that biases cause changes in the CPI to overstate the inflation
rate by ________ percentage points.
A) 0.1 to 0.2
B) 0.2 to 2.0
C) 0.4
D) 0.5 to 1.0
E) 1.0 to 3.0
In the United States, taxpayers are allowed to exclude from taxation a certain amount of
income, called
A) the personal income exclusion.
B) the income allowance.
C) the income tax credit.
D) the personal exemption.
Generally with bond ratings, the higher the rating, the ________ the interest rate an
investor will receive and the ________ the risk that the issuer of the bond will default.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
All of the following are characteristics of game theoryexcept
A) rules that determine what actions are allowable.
B) payoffs that are the results of the interaction among players’ strategies.
C) strategies that players employ to attain their objectives.
D) independence among players