Any competitive equilibrium is Pareto-efficient because, with a competitive equilibrium, A) the marginal rates of substitution are equal for all consumers. B) the price line is the contract curve. C) mutual gains from trade exist. D) the slope of the price line equals the ratio of the MRS for all consumers. ANSWER A
Date: September 9th, 2020
A virtue of income taxes over sales taxes is that _____. a. they are more comprehensive b. they are more difficult to avoid c. the excess burden of an income tax system is far smaller d. progression can be built into the system ANSWER d
Date: September 9th, 2020
One way the Canadian system lowers costs is by rationing expensive procedures. a. True b. False ANSWER a
Date: September 9th, 2020
Expected value represents A) the actual payment one expects to receive. B) the average of all payments one would receive if one undertook the risky event many times. C) the payment one receives if he or she makes the correct decision. D) the payment that is most likely to occur. ANSWER B
Date: September 9th, 2020
In economic models of the public sector, the median voter model presents an extreme view of the way that the public sector allocates resources. a. True b. False ANSWER a
Date: September 9th, 2020
“Pay or play” reduces the health care cost of hiring low-wage employees relative to an employer mandate. a. True b. False ANSWER a
Date: September 9th, 2020
A comprehensive retail sales tax is equivalent to a tax on income when _____. a. there is no deadweight loss from taxation b. there is at least some investment in the economy c. there is zero saving in the economy d. the economy is at full employment ANSWER c
Date: September 9th, 2020
Which of the following is a tax on consumption? a. A comprehensive general sales tax. b. A comprehensive value-added tax c. An income tax in a world without saving. d. All of the above. e. a and b ANSWER d
Date: September 9th, 2020
A gasoline tax to finance highways is a fairly good example of democratic decision-making resulting in the efficient level of output. a. True b. False ANSWER a
Date: September 9th, 2020
The likelihood of an individual’s vote being significant in a Presidential election is fairly high, especially if they live in a swing state. a. True b. False ANSWER b
Date: September 9th, 2020
