failure
2)
Market occurs when: (10pts)
thegovernmentsetspricefloorandceilings.
.thecompetitivemarketsystemunderoroverallocates
resourcestoproduction
therearenoexternalities.
goodsarerivalinconsumption.
Answer Corre
: ct
Points: 10
4)
With a tax of $8,000 on $50,000 taxable income, the average
tax rate is:
(10pts)
16percent.
21percent.
8percent.
26percent.
Answer Corre
: ct
Points: 10
5)
An income tax may be called progressive when the: (10pts)
averagetaxrateincreasesasincomeincreases.
averagetaxratedecreasesasincomeincreases.
averagetaxrateremainsthesameasincomeincreases.
marginaltaxrateremainsthesameasincomeincreases.
Answer Corre
: ct
Points: 10
6)
The average tax rate is the:
(10pts)
sumofallindividualtaxrates.
taxratepaidbymiddleincomehouseholds.
totaltaxpaiddividedbytotaltaxableincome.
increaseintaxesasapercentageofanincreaseinincome.
Answer ct
Points: Corre
: 10
7)
If some activity creates positive externalities as well as
private benefits, then economic theory suggests that the activity
ought to be: (10pts)
taxed.
prohibited.
subsidized.
leftalone.
Answer Corre
: ct
Points: 10
8)
A public good: (10pts)
generallyresultsinsubstantialspillovercosts.
canneverbeprovidedbyanongovernmentalorganization.
can'tbeprovidedtoonepersonwithoutmakingitavailableto
othersaswell.
costsessentiallynothingtoproduceandthusisprovidedbythe
governmentatazeroprice.
Answer Corre
: ct
Points: 10
9)
Which is not one of the conditions for the Coase theorem to
hold? (10pts)
Theownershipofpropertyisclearlydefined.
Thenumberofpeopleinvolvedissmall.
Theamountofmoneydisputedisminor.
Thecostsofbargainingarenegligible.
Answer Corre
: ct
Points: 10