If profit occurs in year 2, then it should be divided by ___.
A. r
B. (1+r)
C. r2
D. (1+r)2
Answer:
There ___ to charge a price for the air or water: ____.
A. is one way; levy a tax
B. is one way; sell permits
C. are two ways; levy a tax or sell (or give) permits
D. are three ways; levy a tax or sell (or give) permits or subsidize technology
Answer:
Figure 2.1 shows the supply and demand diagram for steel. Environmental damage per
unit produced is $60.
Refer to Figure 2.1. The marginal net loss to society from the 200th unit is ____.
A. $20
B. $40
C. $60
D. $300
Answer:
To reduce the 2040 problem, Congress can immediately
A. raise tax growth and benefit growth.
B. slow tax growth and benefit growth.
C. raise benefit growth and slow tax growth.
D. raise tax growth and slow benefit growth.
Answer:
More than half of Treasury debt held by the U.S. government agencies is held by ___.
A. Defense
B. Social Security
C. Medicare
D. Medicaid
Answer:
An _____ argument for taxing consumption by the rich is that it reduces the utility of
the _____.
A. internality; poor
B. externality; poor
C. internality; near rich
D. externality; near rich
Answer:
Revenue from a property tax is easier to forecast than revenue from ______.
A. an income tax but not a sales tax
B. a sales tax but not an income tax
C. a sales tax or an income tax
D. neither a sales tax nor an income tax
Answer:
Imposing a progressive consumption tax on the affluent would be less harmful to _____
than raising the income tax on the affluent.
A. tax revenue
B. saving
C. consumption
D. work effort
Answer:
Under the subtraction method, the firm calculates its VAT by what formula?
A. T= t(S-P)
B. T= tS-tP
C. T= t(S+P)
D. T= tS+tP
Answer:
The consumption tax rate is set so that it raises the same total revenue from the two
persons as the 15% income tax ($30,000).
Refer to Table 9.1. In the bottom block, total saving is ____.
A. $70,000
B. $85,000
C. $100,000
D. $110,000
Answer:
Under a ____ plan, districts with low property per pupil would receive a ____ grant.
A. district power equalizing; lower
B. district power equalizing; higher
C. foundation; lower
D. foundation; higher
Answer:
A tax on the consumers of a good shifts
A. up the demand curve.
B. down the demand curve.
C. up the supply curve.
D. down the supply curve.
Answer:
An always balanced budget rule is ____ because it would require fiscal action that
could ____.
A. desirable; combat a recession
B. undesirable; combat a recession
C. desirable; make a recession worse
D. undesirable; make a recession worse
Answer:
Consider the following: a. skills and knowledge, b. how to learn, c. work ethic, d.
screening and sorting. Which do employers want schools to do?
A. a, b, and c
B. a and b
C. a
D. a, b, c, and d
Answer:
Economists intend pollution taxes to be revenue
A. raisers.
B. reducers.
C. replacers.
D. enhancers.
Answer:
Figure 2.1 shows the supply and demand diagram for steel. Environmental damage per
unit produced is $60.
Refer to Figure 2.1. The MSC of the 200th unit is ____.
A. $200
B. $240
C. $300
D. $360
Answer:
Under any system, the rate of return r* is defined as _____.
A. B2/T1
B. [B2/T1] + 1
C. [B2/T1] ‘“ 1
D. [T1/B2] ‘“ 1
Answer:
If a family with $357,700 of income’”all from labor earnings’”earns another $1,000 of
labor income, its tax will increase by ___. If that family instead earns $1,000 of capital
gains or dividends, its tax will increase by ___.
A. $350; $350
B. $350; $150
C. $396; $396
D. $396; $150
Answer:
The efficiency loss of a tax $T per hour of labor equals ___ (where H is hours).
A. T(ΔH)
B. T2(ΔH)
C. (1/2)T(ΔH)
D. (1/2)T2(ΔH)
Answer:
The MB to consumers from the 200th unit is $240. For the 200th unit of steel:
a) What is the marginal benefit (MB) to consumers? $______.
b) What is the marginal private cost of production (MPC)? $______.
c) What is the marginal damage to the environment? $______.
d) What is the marginal social cost? $______.
e) What is the marginal net loss to society? $______.
Answer:
The Welfare Reform Act of 1996 moved welfare in a _____ direction and changed the
program’s name to ____.
A. liberal; AFDC
B. liberal; TANF
C. conservative; AFDC
D. conservative; TANF
Answer:
In response to a pollution price,
A. polluters will stop polluting.
B. polluters will pollute the same.
C. polluters who can cut back cheaply will cut back least.
D. polluters who can cut back cheaply will cut back most.
Answer:
If there is no externality, health insurance causes ____ that is measured by the area of a
___.
A. an efficiency loss; triangle
B. an efficiency loss; rectangle
C. a redistribution; triangle
D. a redistribution; rectangle
Answer:
Part B of Medicare for doctor fees is funded ___ by general revenue and ___ by
premiums from retirees.
A. 0%; 100%
B. 25%; 75%
C. 75%; 25%
D. 100%; 0%
Answer:
If there is a 95% chance of a $1,000 medical cost and a 5% chance of a $61,000 cost,
then the expected cost is ___.
Answer:
The official government measure of poverty is based on a family’s _____.
Answer:
Most of federal income tax revenue comes from ____ income households.
Answer:
With supply horizontal, the ratio of the efficiency loss L to tax revenue R equals ___.
Answer:
Suppose a commuter would save an hour a day by using a new highway. Then one
measure of the benefit of the highway is the increased ____ as measured by the ___.
Answer:
Government ____ who administer government departments have an incentive to
legislators to ____ their programs.
Answer:
The consumption tax rate is set so that it raises the same total revenue from the two
persons as the 15% income tax ($30,000).
Refer to Table 9.3. A comparison of the bottom and top blocks shows that a switch to a
consumption tax _____ total saving due to the ______.
Answer:
If a project would save 1,000 lives, this adds ____ to the total benefits of the project.
Answer: