Assume that in year 1 you pay an average tax rate of 20 percent on a taxable income of $20,000. In year 2, you pay an average tax rate of 25 percent on a taxable income of $30,000. Assuming no change in tax rates, the marginal tax rate on your additional
$10,000 of income is:
A. 5 percent.
B. 12 percent.
C. 35 percent.
D. 42 percent.
Answer: C
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The figure below shows the supply and demand curves for oranges in Smallville. 
At the price of $4 per pound, sellers offer ________ pounds of oranges per day, and buyers want to purchase ________ pounds of oranges a day.
A. 30; 10 B. 20; 20 C. 10; 20 D. 10; 30
Suppose a paper mill earns $1,000,000 in profits when it pollutes a river, and it can abate pollution at a cost of $A. The effects of the pollution are confined to a single farmer who earns $400,000 if the water he uses from the river is clean and $300,000 if it's polluted. If _______, then abatement would be efficient.
A. A < 300,000 B. A > 100,000 C. A < 100,000 D. A < 400,000
Ceteris paribus, if the market demand for a product decreases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____
a. increase; increase b. indeterminate; decrease c. indeterminate; increase d. decrease; decrease
Property rights are well established for
a. private goods. b. public goods. c. common resources. d. both (b) and (c).