Exam D - Introduction to Microeconomics Exam No 2 Multiple...

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Introduction to Microeconomics Exam No. 2 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ ____ ____ ____ 1. What is the difference between command-and-control policies and market-based policies toward externalities? a. Command-and-control policies rely on taxes, whereas market-based policies rely on quotas. 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 provide incentives for private decisionmakers to solve the problems on their own, whereas market-based policies regulate behavior directly. Table 12-1 2. Refer to Table 12-1 . If Celeste has $47,000 in taxable income, her tax liability will be a. $8,400. b. $7,600. c. $6,900. d. $11,750. 3. Refer to Table 12-1 . If Andrea has $85,000 in taxable income, her marginal tax rate is On Taxable Income . .. The Tax Rate is . .. Up to $7,000 10% From $7,000 to $30,000 15 From $30,000 to $76,000 25 From $76,000 to $168,000 28 From $168,000 to $352,000 33 Over $352,000 35 a. b. c. d. 4. A a. b. c. d. 15%. 28%. 25%. 33%. view of a spectacular sunset along a private beach is an example of a rival but nonexcludable good. public good. nonrival but excludable good. private good. Figure 10-4 ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10. Refer to Figure 10-4. If all external costs were internalized, then the market’s equilibrium output would be a. b. c. d.
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If a. b. c. d. Q 2 . Q 4 . Q 3 . Q 1 . the government levies a $500 tax per car on buyers of cars, then the price paid by buyers of cars would decrease by an indeterminate amount. increase by more than $500. increase by less than $500. increase by exactly $500. The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from having an educated community is a public good, which of the following would not be correct? a. The free-rider problem causes the private market to undersupply education to the community. b. A tax increase to pay for education could potentially make the community better off. c. The private market is the best way to supply education. d. The government can potentially help the market reach a socially optimal level of education. A drought in California destroys many red grapes. As a result of the drought, the consumer surplus in the market for red grapes a.increases, and the consumer surplus in the market for red wine decreases. b. decreases, and the consumer surplus in the market for red wine decreases. c.
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This note was uploaded on 09/27/2011 for the course ECON 101 taught by Professor Gottlieb during the Spring '08 term at Rutgers.

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Exam D - Introduction to Microeconomics Exam No 2 Multiple...

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