Consider the case of a teacher who tells students that those who miss more than three classes for any reason will automatically receive a lower grade.
A) This is an example of a positive incentive for students to attend class.
B) This is an example of a negative incentive for students to attend class.
C) The teacher is assuming that students are irrational, and she must force them to attend class.
D) Students who miss more than three classes are irrational.
Ques. 2Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because
A) the opportunity cost of riding a bus is too high for them.
B) there is no opportunity cost of them to drive.
C) they are not aware of the opportunity cost of driving.
D) they do not behave according to the economic way of thinking.
Ques. 3Suppose you are making 50,000 per year and paying 5,000 per year in income taxes. You get a 10,000 per year raise and your income taxes are now 6,000 per year. Based on this information, the income tax system is
A) proportional.
B) progressive.
C) regressive.
D) bracketed.
Ques. 4When costs spill over to third parties, there is a(n)
A) cost overrun.
B) excessive competition.
C) negative externality.
D) government subsidy.
Ques. 5Suppose you are making 50,000 per year and paying 5,000 per year in income taxes. You get a 10,000 per year raise and your income taxes are now 6,500 per year. Based on this information, the income tax system is
A) proportional.
B) progressive.
C) regressive.
D) bracketed.
Ques. 6If a teacher tells a student that those who attend the study session typically score higher on the final exam,
A) the student has a positive incentive to attend the study session because she may get a higher grade.
B) the student has a negative incentive to attend the study session because she will be punished if she does not go.
C) the student has no greater incentive to attend because there is no guarantee she will get a higher grade on the exam.
D) a C student will be making an irrational decision if she decides to skip the study session since she has plenty of time to go.
Ques. 7Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?
A) The demand curve shifts to the right.
B) The demand curve shifts to the left.
C) a leftward movement along the demand curve
D) a rightward movement along the demand curve
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