Exam E - 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. Seller Cost Marcia $200 Jan $250 Cindy $350 Greg $400 Peter $700 Bobby $800 ____ 1. ____ 2. ____ 3. ____ 4. ____ 5. Table 7-8 The numbers reveal the opportunity costs of providing 10 piano lessons of equal quality. Refer to Table 7-8. The equilibrium market price for 10 piano lessons is $300. What is the total producer surplus in the market? a. $1,050 b. $1,500 c. $50 d. $150 Taxes on labor encourage all of the following except a. people to be paid “under the table.” b. workers to work overtime. c. mothers to stay at home rather than work in the labor force. d. older workers to take early retirement from the labor force. Which of the following statements is correct? a. The average tax rate measures how much the tax system discourages people from working. b. The average tax rate gauges the sacrifice made by a taxpayer, whereas the marginal tax rate gauges the distortion of taxes on consumer decisions. c. The marginal tax rate measures total taxes paid divided by total income. d. The marginal tax rate gauges the sacrifice made by a taxpayer, whereas the average tax rate gauges the distortion of taxes on consumer decisions. Which of the following statements is correct? a. Assuming that implicit costs are positive, economic profit is positive. b. Assuming that explicit costs are positive, accounting profit is equal to economic profit. c. Assuming that explicit costs are positive, economic profit is greater than accounting profit. d. Assuming that implicit costs are positive, accounting profit is greater than economic profit. What is the difference between command-and-control policies and market-based policies toward externalities? a. Command-and-control policies regulate behavior directly, whereas market- based policies provide incentives for private decisionmakers to change their behavior. b. Command-and- control policies are efficient, whereas market-based policies are inefficient. c. Command-and- control policies rely on taxes, whereas market-based policies rely on quotas. d. Command-and-control policies provide incentives for private decisionmakers to solve the
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____ 6. ____ 7. problems on their own, whereas market-based policies regulate behavior directly. Which of the following is a difference between corrective taxes and tradable pollution permits? a. Corrective taxes internalize the pollution externality while tradable pollution permits do not. b.With corrective taxes firms pay for pollution; with tradable pollution permits firms do not. c. Corrective taxes are a market-based solution while tradable pollution permits are a command-and-control policy. d. With a corrective tax the government sets the price of pollution; with tradable pollution permits, demand and supply set the price of pollution. Figure 7-5
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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 E - Introduction to Microeconomics Exam No. 2 Multiple...

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