The plan called Responsible Health Insurance has the following elements:
A. an individual requirement to obtain insurance, a refundable tax credit, and last resort
insurance.
B. an individual requirement to obtain insurance and a refundable tax credit.
C. an individual requirement to obtain insurance and last resort insurance.
D. a refundable tax credit and last resort insurance.
Answer:
As we move from low-income to high-income homeowners, if the ratio of home value
to income rises, then a property tax would be ____.
A. progressive
B. proportional
C. regressive
D. super-regressive
Answer:
Producing a given quantity of a good at minimum cost is called _____ efficiency.
A. distributive
B. redistributive
C. productive
D. allocative
Answer:
The optimal quality of a public school occurs where _____ in ____ public good
diagram.
A. MB = MC; an unusual
B. ΣMB = MC; an unusual
C. MB = MC; a standard
D. ΣMB = MC; a standard
Answer:
With supply horizontal, the ratio of the efficiency loss L to tax revenue R equals ___.
A. (1/2)t2e
B. (1/2)te
C. t2e
D. te
Answer:
The efficiency loss of a tax $T per unit on a good equals ___ (where Q is quantity).
A. T(ΔQ)
B. T2(ΔQ)
C. (1/2)T(ΔQ)
D. (1/2)T2(ΔQ)
Answer:
The scale of a project should be increased as long as the ___ exceeds the __.
A. total social benefit; total social cost
B. total social benefit; marginal social cost
C. marginal social benefit; total social cost
D. marginal social benefit; marginal social cost
Answer:
With no policy, each firm emits 120 tons of carbon. As H reduces its emissions from
120 to 0, its marginal abatement cost (MAC) rises from $0 to $480; as L reduces its
emissions from 120 to 0, its MAC rises from $0 to $120. The MD of a ton of carbon is
$96. The tax per ton is T.
Refer to Figure 2.2. Under a tradable permits treaty where the total number of permits is
120, if country L is unaffected by global warming, country L should still agree to the
treaty if it is given at least ____ permits.
A. 24
B. 48
C. 72
D. 96
Answer:
Economists think ___ should be considered in deciding whether to intervene military.
A. cost but not benefit
B. benefit but not cost
C. cost and benefit
D. neither cost nor benefit
Answer:
A balanced budget rule disciplines legislators because they must raise ____ if they want
to raise _____ and cut _____ if they want to cut ____.
A. spending; taxes; spending; taxes
B. taxes; spending; spending; taxes
C. taxes; spending; taxes; spending
D. spending; taxes; taxes; spending
Answer:
“I’ll vote for your highest priority if you vote for mine.” This is called ___
A. courtesy
B. lobbying
C. logrolling
D.corruption
Answer:
Electricity production with coal containing sulfur generates sulfur dioxide pollution. It’s
better to tax sulfur rather than electricity in order to provide an incentive to produce
A. electricity with less sulfur.
B. sulfur with less electricity.
C. less electricity.
D. less sulfur with less electricity.
Answer:
If the tax on labor doubles, T doubles, ΔH ____, and the efficiency loss _____.
A. stays constant; doubles
B. stays constant; quadruples
C. doubles; doubles
D. doubles; quadruples
Answer:
Cost-benefit analysis applies
A. only to government.
B. only to business firms.
C. only to government and business firms.
D. to government, business firms, and individuals.
Answer:
Consumers ___ a tariff on clothing because the tariff will have a ___ effect on each
consumer’s budget.
A. don’t lobby against; small
B. don’t lobby against; large
C. lobby against; small
D.lobby against; large
Answer:
A firm’s VAT is determined by its sales S and its purchases P where P
A. includes new capital goods.
B. excludes new capital goods.
C. includes depreciation on new capital goods.
D. includes depreciation on all capital goods.
Answer:
In the U.S., nationally, tradable permits have been
A. used for sulfur dioxide.
B. used for carbon.
C. used for gasoline.
D. proposed but not yet used.
Answer:
With adverse selection, each time an insurer raises the premium, those who decide to
____ have a ____ cost than the insurer anticipated.
A. enroll; lower
B. enroll; higher
C. use medical care; lower
D. use medical care; higher
Answer:
The U.S. income tax is too easy on capital gains because it _____, but it is too hard on
capital gains because it _____.
A. defers tax on unrealized gains; taxes nominal gains
B. taxes nominal gains; defers tax on unrealized gains
C. defers tax on realized gains; taxes nominal gains
D. taxes nominal gains; defers tax on realized gains
Answer:
Would it be worthwhile for high-income countries to pay low-income countries to help
reduce global warming? ___ Can this be done with either a tax treaty or a permit treaty?
___
A. no; no
B. no; yes
C. yes; no
D. yes; yes
Answer:
Refer to Figure 3.1. At a wall thickness greater than the social optimum, it would ____
cost saving among the three families so that each would ___ from making the wall a
foot thinner.
A. not be possible; lose
B. not be possible; gain
C. be possible; lose
D. be possible; gain
Answer:
The most progressive way to raise payroll tax growth would be to
A. raise the payroll tax rate.
B. raise the payroll tax ceiling.
C. impose a tax on all payroll above the ceiling.
D. exempt the first $X of payroll from tax.
Answer:
Figure 6.1 shows how X% insurance affects the demand/supply diagram for medical
care. The insurer pays 67% and patients, 33%, of any medical bill.Refer to Figure 6.1.
When 67% insurance is introduced, the demand curve shifts from _______.
A. D” TO D’
B. D” to D
C. D to D’
D. D to D”
Answer:
If there is a positive externality (e.g. medical care), then a corrective ___ is needed.
Answer:
One reason Stiglitz and Bilmes’s cost estimate is much higher than federal military
budget spending on Iraq is that they include the cost of the
Answer:
If a firm borrows $100,000 to build in year 0, profit would be $110,000 in year 1. The
firm should do it if and only if the interest rate is less than __.
Answer:
Line #1 in the tax return is ___.
Answer:
Switching a payroll tax from workers to employers would ___ the burden on workers.
Answer:
Who should produce a public good?
Answer:
If H (in a 35% tax bracket) and L (in a 10% tax bracket) each give $1,000 to charity,
then under the charitable deduction, H’s tax saving is ___ and L’s is ___.
Answer:
According to George Harrison of the Beatles, the top tax rate in Britain in the 1960s
was ___ because the Tax Man said, “There’s one for you, ___ for me.”
Answer:
If a tax on capital income reduces saving and investment, then it ___ the wage by _____
the productivity of labor and shifting the demand curve of labor ___.
Answer: