1) Table 12-11
If Bud has taxable income of $78,000, his marginal tax rate is
a. 19.3%.
b. 24.0%.
c. 26.8%.
d. 34.0%.
2) Scenario 22-3
At issue in a particular city vote is how much to spend, per person, on road repair next
year. Among the 10,000 voters, 2,900 prefer to spend $500 per person, but no more;
2,200 prefer to spend $600 per person, but no more; 1,900 prefer to spend $800 per
person, but no more; 1,600 prefer to spend $1,200 but no more, and 1,400 prefer to
spend $1,400 per person, but no more.
Refer to Scenario 22-3. If there is a vote on whether to spend $800 per person or $1,200
per person, the median voter will vote to spend
a.$800 per person and the voting outcome will be $800 per person.
b.$800 per person and the voting outcome will be $1200 per person.
c.$1200 per person and the voting outcome will be $800 per person.
d.$1200 per person and the voting outcome will be $1200 per person.
3) Scenario 16-2
Suppose market demand for a product is given by the equation P = 20 – Q. For this
market demand curve, marginal revenue is MR = 20 – 2Q.
If the marginal cost of producing this good is 4, what quantity would a
profit-maximizing monopolist produce?
a.Q = 2
b.Q = 4
c.Q = 6
d.Q = 8
4) A direct or positive relationship exists between a country’s
a.productivity and its standard of living.
b.amount of government spending and its productivity.
c.total population and its average citizen’s income.
d.rate of population growth and the extent of its trade with other countries.
5) Suppose that corn farmers want to increase their total revenue. Knowing that the
demand for corn is inelastic, corn farmers should
a.plant more corn so that they would be able to sell more each year.
b.increase spending on fertilizer in an attempt to produce more corn on the acres they
farm.
c.reduce the number of acres on which they plant corn.
d.contribute to a fund that promotes technological advances in corn production.
6) The largest source of revenue for the federal government is the
a.individual income tax.
b.property tax.
c.sales tax.
d.corporate income tax.
7) Figure 8-11
Suppose Q1= 4; Q2 = 7; P1= $6; P2= $8; and P3= $10. Then, when the tax is imposed,
a.the government collects $28 in tax revenue.
b.producer surplus decreases by $13.
c.consumer surplus decreases by $11.
d.the deadweight loss amounts to $9.
8) Which of the following represents a way that a government can help the private
market to internalize an externality?
a.taxing goods that have negative externalities
b.subsidizing goods that have positive externalities
c.The government cannot improve upon the outcomes of private markets.
d.Both a and b are correct.
9) If duopolists colluded but then stopped colluding,
a.price and quantity would rise.
b.price would rise and quantity would fall.
c.price would fall and quantity would rise
d.price and quantity would fall.
10) Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
The firm should shut down if the market price is
a.above $8.
b.above $6.30 but less than $8.
c.above $4.50 but less than $6.30.
d.less than $4.50.