When misallocation of resources for production of a good results in spillover effects on third parties, there is a
A) market failure.
B) government failure.
C) legislative failure.
D) productive failure.
Ques. 2Some oil refineries were damaged by Hurricane Ike of 2008, leading to
A) a decrease in supply of gasoline.
B) a decrease in quantity supplied of gasoline.
C) a decrease in demand for gasoline.
D) a decrease in quantity demanded for gasoline.
Ques. 3Holding supply constant, a reduction 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.
Ques. 4Which of the following will occur as the price of a good decreases?
A) The demand curve for that good will shift to the left.
B) The demand curve for that good will shift to the right.
C) The quantity demanded for that good will increase.
D) Demand for that good will increase.
Ques. 5Suppose the tax amount on the first 10,000 income is 0; 2000 on the next 20,000; 4000 on the next 20,000; 6000 on the next 30,000; and 40 percent on any income over 80,000. Family A has income of 30,000 and Family B has income of 80,000.
What is the marginal and average tax rate for each family? A) Family A: marginal10 percent; average6.7 percent; Family B: marginal30 percent; average15 percent.
B) Family A: marginal10 percent; average20 percent; Family B: marginal30 percent; average23 percent.
C) Family A: marginal10 percent; average10 percent; Family B: marginal40 percent; average40 percent.
D) Family A: marginal10 percent; average15 percent; Family B: marginal40 percent; average20 percent.
Ques. 6Labor, human capital, and entrepreneurship are resources related to human beings. Distinguish among the three resources.
What will be an ideal response?
Ques. 7A price system is considered to be efficient when
A) it fails to have the goods that consumers want.
B) an underground market develops.
C) all resources are allocated to the highest-valued uses.
D) firms produce more than what consumers want.
Ques. 8If Apple's iTunes Music Store increases its fee for its music downloads, the law of demand predicts that
A) the number of iTunes music downloads would increase.
B) there would be no change in the demand for iTunes music downloads.
C) the number of iTunes music downloads would decrease.
D) iTunes music supply would change but demand would not.
Quick Reply
