1) The U.S. income tax
a.discourages saving.
b.encourages saving.
c.has no effect on saving.
d.will reduce the administrative burden of taxation.
2) In 2009, the lowest quintile of income earners paid about
a.1 percent of income as taxes and paid less than 1 percent of all taxes.
b.5 percent of income as taxes and paid less than 1 percent of all taxes.
c.1 percent of income as taxes and paid about 5 percent of all taxes.
d.5 percent of income as taxes and paid about 5 percent of all taxes.
3) The marginal product of labor can be defined as the change in
a.profit divided by the change in labor.
b.output divided by the change in labor.
c.labor divided by the change in output.
d.labor divided by the change in total cost.
4) Most economists view the United States as an ongoing experiment that raises serious
doubts about the virtues of free trade.
a.True
b.False
5)
If the price decreases in the region of the demand curve between points B and C, we
can expect total revenue to
a.increase.
b.stay the same.
c.decrease.
d.first increase, then decrease until total revenue is maximized.
6) When the social cost curve is above a product’s supply curve,
a.the government has intervened in the market.
b.a negative externality exists in the market.
c.a positive externality exists in the market.
d.the distribution of resources is unfair.
7) In the circular-flow diagram, factors of production include land, labor, and capital.
a.True
b.False
8) Figure 16-4
Assume the firm in the figure is currently producing 20 units of output and charging
$925. The firm
a.will increase its profits if it raises its price and reduces its production level.
b.will increase its profits if it lowers its price and expands its production level.
c.is maximizing profits.
d.will increase its profits if it raises its prices and expands its production level.
9) Corrective taxes cause deadweight losses, reducing economic efficiency.
a.True
b.False
10) The U.S. patent system
a.makes general knowledge excludable.
b.makes specific, technical knowledge excludable.
c.creates a disincentive to invent.
d.Both a and b are correct.