fall2010exam2C

fall2010exam2C - Name: _ Class: _ Date: _ ID: C...

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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 a. accounting profit will be the same as economic profit. b. accounting profit will be greater than economic profit. c. the relationship between accounting profit and economic profit cannot be determined without more information. d. accounting profit will be less than economic profit. 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 a. an average tax rate of 22.5 percent when her income is $30,000. b. a marginal tax rate of 50 percent when her income rises from $60,000 to $60,001. c. a marginal tax rate of 10 percent when her income rises from $40,000 to $40,001. d. an average tax rate of 22.0 percent when her income is $50,000. ____ 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? a. $0 b. $25 c. $30 d. $50
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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 a. $0.85. b.
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fall2010exam2C - Name: _ Class: _ Date: _ ID: C...

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