Another name for a flat-rate tax in which the same tax rate applies to all income earners is a
A) proportional tax.
B) progressive tax.
C) regressive tax.
D) passive tax.
Ques. 2You have the option of consuming one cup of coffee or two donuts or three oranges. You picked the cup of coffee. Therefore the opportunity cost of this cup of coffee is
A) the price of the cup of coffee.
B) the difference in the prices of these three products.
C) the price of the donuts as they are usually consumed with coffee.
D) either the donuts or the oranges, whichever you like more.
Ques. 3A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
A) cynical behavior in modern democracies.
B) failing to consider the alternatives available to the government.
C) a concern that people are not rational when they make decisions.
D) using incentives to alter behavior.
Ques. 4A decrease in demand and a decrease in supply will lead to
A) unambiguous increases in both price and quantity.
B) unambiguous decreases in both price quantity.
C) an unambiguous decrease in price, but the effect on quantity is indeterminate.
D) an unambiguous decrease in quantity, but the effect on price is indeterminate.
Ques. 5The labor force includes individuals who are: I. Employed II. Unemployed III. Discouraged workers
A) I only
B) Both I and II
C) Both I and III
D) All I, II and III
Ques. 6If the production of a product results in significant external costs, an appropriate government policy might be to
A) subsidize the production of the good.
B) tax producers and thus shift the supply curve to the left.
C) tax consumers' incomes and thus shift the demand curve to the left.
D) subsidize consumers since the good is being under-consumed.
Ques. 7The Social Security tax is considered to be a
A) regressive tax.
B) progressive tax.
C) proportional tax.
D) marginal tax.
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