Econ_198_Spr_07_Exam__4

Econ_198_Spr_07_Exam__4 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2007 FOURTH HOUR EXAMINATION Name (Please Print): ______________________________________ [40 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 14 points total. 1. When economists argue that pollution is fundamentally the result of externalities they mean that: a. most people regard pollution as something apart from, or external to, their daily lives. b pollution is generated because producers and consumers don’t take third-party effects into account when making their decisions. c. environmental issues are really outside of, or external to, basic economic analysis. d. markets tend to be more concerned with efficiency issues than equity concerns. e. decision-makers give undue consideration in formulating public policy to the impact of activities on people outside the mainstream. 2. A tax is considered progressive if: a. the rich pay more in taxes than the poor do. b. marginal tax rates are above 50 percent for the highest group of wage earners or businesses. c. wealth is taxed as well as consumption and income. d. the marginal tax rate decreases as income decreases. e. only those who are above the poverty level pay taxes. 3. In the U.S. the level of income equal to triple the amount needed to purchase adequate nutrition is called: a. the Lorenz curve. b. the EITC. c. vertical equity. d. the poverty line. e. OASDHI. 4. Who was the first economist to propose that governments use taxes and subsidies to correct for the presence of externalities? a. Ronald Coase b. Karl Marx c. A.C. Pigou d. David Ricardo e. Adam Smith 5. Your roomie likes to play her country & western CDs in the evening – at the very time you most like to study in your shared space. You tell her you’ll do her laundry once a week if she’ll refrain. She agrees to your proposal. This is an example of: a. a contestable market. b.
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This test prep was uploaded on 04/07/2008 for the course ECON 198 taught by Professor Sanderson during the Spring '08 term at UChicago.

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Econ_198_Spr_07_Exam__4 - Introduction to Microeconomics...

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