The concept of externalities means that subsidizing education can be justified on the grounds that as a student becomes better educated, the student will
A) earn a higher income.
B) enhance the lives of people around the student.
C) make contributions to the student's alma mater.
D) none of the above
Ques. 2Alex, Bill, and Cid live in Souland. Their annual incomes and the amounts they pay in income tax are shown in the table below. Income Tax Alex 30,000 6,000 Bill 20,000 4,000 Cid 40,000 8,000 The income tax in Souland is
A) proportional.
B) disproportional.
C) regressive.
D) progressive.
Ques. 3The demand for a product produced by a union becomes more elastic. After this change, how does an increase in the wage rate paid its members affect their employment?
A) It does not decrease employment at all.
B) It decreases employment by less than it would have before.
C) It decreases employment by more than it would have before.
D) It increases employment.
Ques. 4What are the requirements for perfect competition?
What will be an ideal response?
Ques. 5Consider the country of Outland. In Outland, people pay 10 percent of their income as a tax whether they earn 10,000 or 100,000 annually. Outland has ________ tax structure.
A) a progressive
B) a regressive
C) a proportional
D) an excessive
Ques. 6One reason that education has external benefits is that
A) knowledge has diminishing marginal productivity.
B) education creates job opportunities for teachers.
C) education creates better citizens.
D) property owners pay taxes to support the school system.
Ques. 7In the above figure, if the budget line shifts from RT to RS, the income effect is illustrated by the move from
A) a to b.
B) a to c.
C) b to c.
D) T to S.
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