Leonard, Sheldon, Raj, and Penny each like science fiction moves. The price of a special boxed set of Star Trek DVDs is $50 . Leonard values the set of movies at $70, Sheldon at $65, Raj at $60, and Penny at $55 . Suppose that if the government taxes DVDs at $10 each, the price rises to $60 . A consequence of the tax is that consumer surplus shrinks by
a. $50 and tax revenues increase by $30, so there is a deadweight loss of $20.
b. $35 and tax revenues increase by $30, so there is a deadweight loss of $5.
c. $20 and tax revenues increase by $20, so there is no deadweight loss.
d. $15 and tax revenues increase by $20, so there is no deadweight loss.
b
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Per capita income is calculated as:
a. national income divided by number of households. b. national income divided by number of people. c. number of households divided by national income. d. number of people divided by national income. e. number of people divided by domestic income.
Individuals are more likely to engage in productive activities when institutions and policies
a. create a fair and unbiased judicial system. b. result in high and variable rates of inflation. c. transfer a large share of income through the political process. d. are used to centrally plan the economy.
Analysis that aims at determining only the economic consequences of a particular policy is called ________ analysis.
A. positive B. normative C. monetary D. fiscal
Assume that there is a supply and demand market for non-preferred workers. If prejudice against these workers among employers increases, then there will be a(n):
A. Increased supply of these workers, a rise in their wage rate, and a decrease in their employment B. Increased demand for these workers, a rise in their wage rate, and an increase in their employment C. Decreased supply of these workers, a fall in their wage rate, and a decrease in their employment D. Decreased demand for these workers, a fall in their wage rate, and a decrease in their employment