A tax rate system characterized by higher marginal tax rates as income increases is known as :

A tax rate system characterized by higher marginal tax rates as income increases is known as
 
  A) a progressive tax system.
  B) a regressive tax system.
  C) a proportional tax system.
  D) a flat-rate tax system.

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Ques. 2

Holding supply constant, an increase in demand leads to
 
  A) lower prices and higher quantity supplied.
  B) lower prices and lower quantity supplied.
  C) higher prices and higher quantity supplied.
  D) higher prices and lower quantity supplied.

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Ques. 3

Are all goods economic goods? Are all economic goods also goods? Explain.
 
  What will be an ideal response?

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Ques. 4

Distinguish between scarcity and shortages.
 
  What will be an ideal response?

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Ques. 5

In recent years, the price of smartphones has fallen, while the quantity exchanged of smartphones has risen. We can conclude that this is most likely a result of
 
  A) a decrease in supply while demand remained constant.
  B) an increase in demand while supply remained constant.
  C) an increase in demand that exceeded an increase in supply.
  D) an increase in supply that exceeded an increase in demand.

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Ques. 6

If people act as if they systematically pursue their own self-interest, then they will most likely
 
  A) respond irrationally to any incentive.
  B) respond to a given incentive in a random manner.
  C) respond predictably to a given incentive.
  D) not respond to any incentive.

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Ques. 7

When economists talk about a demand schedule for a product, they mean
 
  A) the amount of a good that consumers intend to purchase at each price in a set of possible prices in a given time period.
  B) the amount of a good that consumers are able to purchase (though they might not be willing to) at different prices in a given period of time.
  C) the amount of a good that consumers intend to purchase at only one particular price in a given period of time.
  D) the amount of a good that producers are willing to make available for sale at a particular price in a given time period.

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Ques. 8

A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called
 
  A) a public good.
  B) a merit good.
  C) an externality.
  D) the free-rider problem.

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Ques. 9

The marginal tax rate and the average tax rate are the same under a
 
  A) progressive income tax system.
  B) regressive income tax system.
  C) proportional income tax system.
  D) none of the above.

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Ques. 10

A demand curve is a graphical representation of
 
  A) consumer tastes.
  B) national income.
  C) the demand schedule.
  D) relative prices.

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Ques. 11

One major assumption of economics is that people
 
  A) act as if they systematically pursue self-interest.
  B) behave randomly without any predictable pattern.
  C) are sometimes rational and sometimes irrational.
  D) always pursue the interests of others.