State governments place excise taxes on alcohol

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19. State governments place excise taxes on alcohol because: A) it discourages drinking alcohol while raising revenue for the government. B) they want to subsidize alcohol production. C) they want to encourage individuals to produce their own alcohol. D) of all of the above.
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ECON 2106 Shelby Frost Exam 1 2:30pm TR Spring 2009 Version A Page 11 20. Which of the following is NOT one of the four principles of individual choice? 21. Margo spends $10,000 on one-year's college tuition. The opportunity cost of spending one year in college for Margo is: 22. The circular-flow diagram illustrates how firms _______ goods and services and _______ factors of production. 23. Which of the following is NOT one of the five principles for understanding how individual choices interact? A) Resources should be used as efficiently as possible to achieve society's goals. B) There are gains from trade. C) Markets always lead to efficiency. D) Markets move toward equilibrium. 24. In a single day, George can bake 10 cakes while Greta can bake 5 cakes. We then know that: 25. If the government feels that the price in the market is too low for the _______, it can impose a _____.
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ECON 2106 Shelby Frost Exam 1 2:30pm TR Spring 2009 Version A Page 12 Use the following to answer question 26: Figure: Strawberries and Submarines 26. (Figure: Strawberries and Submarines) As the economy moves from point A toward, say, point D , it will find that the opportunity cost of each additional submarine: 27. If the price of chocolate-covered peanuts increases and the demand for strawberry licorice twists increases, this indicates that these two goods are: A) normal goods. C) complementary goods. B) substitute goods. D) inferior goods.
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