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fall2010exam2C

# fall2010exam2C - Name Class Date ID C Introduction to...

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Name: ________________________ Class: ___________________ Date: __________ ID: C 1 Introduction to Microeconomics - Exam 2 Multiple Choice Identify the choice that best completes the statement or answers the question. Table 12-15 The dollar amounts in the last three columns are the taxes owed under the three different tax systems. Income Tax System A Tax System B Tax System C \$ 50,000 \$10,000 \$25,000 \$10,000 100,000 25,000 30,000 20,000 200,000 80,000 40,000 40,000 ____ 1. Refer to Table 12-15. Which of the three tax systems is proportional ? a. Tax System A b. Tax System B c. Tax System C d. None of the systems are proportional. ____ 2. Suppose that for a particular business there are no implicit opportunity costs. Then Scenario 12-3. A taxpayer faces the following tax rates on her income: 20 percent of the first \$40,000 of her income; 30 percent of all her income above \$40,000. ____ 3. Refer to Scenario 12-3. The taxpayer faces ____ 4. David walks Carolyn’s dog once a day for \$50 per week. Carolyn values this service at \$60 per week, while the opportunity cost of David’s time is \$30 per week. The government places a tax of \$35 per week on dog walkers. After the tax, what is the total surplus?

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Name: ________________________ ID: C 2 ____ 5. What is the difference between command-and-control policies and market-based policies toward externalities? a. Command-and-control policies provide incentives for private decisionmakers to solve the problems on their own, whereas market-based policies regulate behavior directly. b. Command-and-control policies regulate behavior directly, whereas market-based policies provide incentives for private decisionmakers to change their behavior. c. Command-and-control policies are efficient, whereas market-based policies are inefficient. d. Command-and-control policies rely on taxes, whereas market-based policies rely on quotas. ____ 6. Noah drinks Dr. Pepper. He can buy as many cans of Dr. Pepper as he wishes at a price of \$0.50 per can. On a particular day, he is willing to pay \$0.95 for the first can, \$0.80 for the second can, \$0.60 for the third can, and \$0.40 for the fourth can. Assume Noah is rational in deciding how many cans to buy. His consumer surplus is Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. ____
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