One drawback of deferred payments is that A) employees may shirk anyway. B) employers might fire high achievers to avoid paying higher wages or bonuses. C) it is difficult to determine who are the good and who are the bad workers. D) employees have to work for the firm for a long time. ANSWER […]
Date: September 9th, 2020
The marginal tax rate from the food stamp program is _____. a. zero b. 10 percent c. 20 percent d. 30 percent ANSWER d
Date: September 9th, 2020
Shin likes to spend a (relatively small) portion of his income on vacations to Cabo San Lucas (a popular resort area in Mexico). On these trips, he either stays at a four star resort with panoramic ocean views or a more modest, and slightly deteriorating hotel in the noisy part of town. Understandably, the four […]
Date: September 9th, 2020
The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of demand for lettuce is A) -0.56. B) -1.15. C) -0.8. D) -1.57. ANSWER B
Date: September 9th, 2020
People on welfare often face the highest marginal tax rates of anyone because ______. a. of our regressive income tax system b. of the non-deducibility of state sales taxes c. of the loss of entitlement payments when earning additional income d. of increasing marginal utility of income ANSWER c
Date: September 9th, 2020
A firm’s profit is A) usually negative when opportunity costs are included. B) the difference between marginal revenue and marginal cost. C) the opportunity cost of the firm’s shareholders. D) the difference between revenue and cost. ANSWER D
Date: September 9th, 2020
Recall that the Cobb-Douglas Utility function U(X,Y) = XaY1-a has the unusual property that the demand for each good depends only on its own price. Therefore, a consumer will always allocate the same proportion of income to each good. Specifically, the demand for X is X* = aI/px where I is income and px is […]
Date: September 9th, 2020
When a firm produces 1000 widgets with total cost of $2000 and fixed cost of $1000, what is the average variable cost? A) $2 B) $1 C) $0.50 D) $0.20 ANSWER B
Date: September 9th, 2020
Customers are usually more willing to pay more for the first unit of a good they purchase than for the second, third, or subsequent units. This implies that A) typical consumers are irrational. B) firms are using non-linear price discrimination. C) firms are unable to determine their customers’ reservation prices. D) typical consumers have a […]
Date: September 9th, 2020
Which of the following statements about winner’s curse is wrong? A) Overbidding occurs when bidders are uncertain about the true value of the good. B) The phenomenon occurs in common value auctions. C) When intelligent bidders shade their bids, sellers receive more money with a sealed-bid auction than an English auction D) The phenomenon will […]
Date: September 9th, 2020
